Labor Rate Calculator: The Hourly Rate Your Numbers Need
Put in what you want to earn, what the business costs to run and how many of your hours you actually bill, and see the hourly rate that covers all of it.
Your numbers
Free, no signup. Nothing you type is saved or sent. The numbers start as examples: change them to yours.
What you want to pay yourself a month.
Truck and fuel, insurance, tools, phone, software, licenses, bookkeeping: everything that isn't tied to one job.
What the business keeps after your pay, for slow months, equipment and growth.
All of them: jobs, driving, quoting, supplier runs, paperwork. 46 hours a week is about 200 a month.
Hours a customer actually pays for. Track a normal week if you're not sure.
- Revenue needed each month
- $8,000.00
- Share of your hours you bill
- 60%
- Rate if every hour were billed
- $40.00
That rate is the number every estimate starts from. Save it on your labor services in Handro's pricebook so every labor line uses it, and timesheets log each person's hours from job clock-in and clock-out. Team is US$49 a month flat for up to 10 people, Solo is US$14.99 a month for one person, and Starter is free for one person and 10 jobs a month.
Start freeNo card needed to start.
How to use it
- Put in your monthly pay, overhead and the profit you want on top.
- Put in the hours you work in a month and the hours you bill.
- Read the hourly rate, and compare it with the rate if every hour were billed.
How this is worked out
The revenue you need each month is your pay plus overhead plus profit. The hourly rate is that revenue ÷ the hours you bill. The last line divides the same revenue by every hour you work, to show what your unbilled hours cost.
With the example numbers: $5,000 + $2,000 + $1,000 = $8,000 a month. Billing 120 of 200 hours (60%), the rate is $66.67 an hour. If every hour were billed it would be $40, so the time nobody pays for adds $26.67 to every billed hour.
The hours you don't bill set your rate
Driving, quoting, buying parts and paperwork are real work that no customer pays for by the hour, so the hours you do bill have to carry them. Bill 140 of the same 200 hours instead of 120 and the example rate drops from $66.67 to $57.14.
Batching estimates, tighter routes and fewer supplier runs can be worth as much as a price increase.
Using this rate on a quote
This is a charge rate: it already includes your overhead and profit. Put it straight on a labor line, or into the hourly rate field of the pressure washing, lawn mowing and house cleaning calculators. In the job pricing calculator, use your labor cost instead, or enter this rate and set its overhead and profit to 0.