Find the hourly rate your business needs.
Enter annual pay, burden, overhead, billable hours, and profit target. The calculator estimates the hourly labor rate needed to support those assumptions.
Hourly rate is only one part of the estimate.
The right rate helps, but the estimate still needs clear scope, materials, assumptions, exclusions, and a price that matches the risk of the job.
FAQ
How does this labor rate calculator work?
Enter annual pay, payroll burden, annual overhead, billable hours, and a profit target. The calculator estimates the hourly rate needed to cover those assumptions.
What are billable hours?
Billable hours are the hours you can charge to customers. They are usually lower than total working hours because of travel, estimating, purchasing, callbacks, admin, and downtime.
What is payroll burden?
Payroll burden is the extra cost on top of base pay, such as payroll taxes, workers comp, benefits, paid time off, and similar labor-related costs.
Should overhead be included in labor rate?
Many contractors recover some overhead through labor rate. Others allocate overhead by job or markup. Use this calculator to test assumptions, then compare against your own bookkeeping.
Is this financial advice?
No. This is a planning aid for estimating. Actual pricing should account for your books, local market, risk, taxes, insurance, and professional advice where needed.