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Contractor labor rate calculator
Enter your monthly overhead, crew size and pay, and how many paid hours are actually billable. The calculator gives your break-even hourly rate and the rate you need for your target margin.
How to use it
- Overhead. Everything you pay monthly that isn't crew wages or job materials: truck, insurance, tools, software, office, licenses.
- Crew cost. Average pay per hour including payroll taxes, workers' comp and benefits.
- Billable share. Travel, estimates, setup and cleanup are paid but rarely billed — 60–75% billable is common.
- Margin. The profit you want on labor. Materials markup comes on top.
Questions
How do contractors calculate their hourly rate?
Add monthly overhead and crew wages (with taxes and insurance), divide by the hours you actually bill in a month to get the break-even rate, then divide by one minus your target margin.
Should I charge by the hour or by the job?
Many contractors price by the job but build that price from hours × rate plus materials and markup. Knowing your real hourly rate keeps fixed prices profitable.
Does this include materials?
No. Mark up materials separately on each estimate.
Skip the typing
Let Cost Estimator build the estimate
- Describe the job — type, dictate or snap a few photos
- Answer a few questions — size, quality level and site conditions
- Review the estimate — materials and labor by trade with local prices
- Send & invoice — branded PDF or link, invoice in one tap
Try it now →3-day trial · Full access · Cancel anytime