Sundial Tools

Hourly rate calculator for tradesmen

Work out the hourly rate you actually need to charge to hit your income target — once overheads and unbillable hours are honestly accounted for. Runs entirely in your browser.

Find your hourly rate

Enter your targets for a year. The rate updates as you type.

Van, fuel, tools, insurance, phone, software, accountancy — everything the business costs to run.
52 minus holiday and time off.
Hours you can actually invoice — not total hours worked.
Rate you need to charge
$0.00
per billable hour
Billable hours / year
0
weeks × billable hours
Total to recover / year
$0.00
income + overheads
This is a floor, not a ceiling. The result is the rate that keeps the lights on and pays you your target. If your market supports more, charge more — the gap is your growth.

Calculator by Sundial Tools

Got your rate? Turn it into a proper quote.

An hourly rate is only useful when it lands on a clean, professional quote. QuoteMate itemises labour and materials and produces a tidy quote you can send a customer in minutes.

Open QuoteMate — free to use →

How the hourly rate calculator works

The rate you need is simpler than it looks. Take the income you want to take home, add everything it costs to run the business for a year, and divide by the hours you can genuinely put on an invoice. That last number is where most tradespeople trip up.

In formula terms: hourly rate = (target income + annual overheads) ÷ billable hours per year. Billable hours per year is simply the weeks you work multiplied by the hours each week you can actually charge for.

Why billable hours are the key

A full working week is rarely a full billable week. Quoting jobs, driving between sites, collecting materials, chasing invoices, answering the phone and doing the books are all real work — but you cannot usually charge a customer a line item for them. It is common for a 40 hour week to contain only 25 to 30 billable hours. If you divide your income target by 40 hours instead of your true billable hours, every rate you quote will quietly undercharge.

Overheads are not optional

Your van, fuel, tools, insurance, phone, accounting software and accountant all cost money whether or not a specific job pays for them. Adding your total annual overheads to your income target, then spreading that across your billable hours, means every hour you charge chips away at those costs. Leave overheads out and they come straight off your take-home pay instead.

Turning a rate into a price for a job

Once you know your hourly rate, pricing a job follows naturally:

  1. Estimate the labour hours the job will take and multiply by your rate.
  2. Add materials at cost, plus a sensible markup to cover waste, handling and the money tied up in buying them.
  3. Add any hire, disposal, parking or permit costs specific to the job.
  4. Review the total against what similar work sells for locally, and adjust if your market clearly supports more.

A calculated rate gives you a confident starting point, so you are quoting from real numbers instead of a gut feeling. It also makes it far easier to explain a price to a customer if they push back, because every part of it traces back to a cost.

This calculator is for general planning only and does not account for tax, national insurance, pension contributions or VAT, which vary by country and by individual circumstances. Speak to a qualified accountant about your specific situation before setting rates.

Frequently asked questions

How do I work out my hourly rate as a tradesman?

Add the income you want to take home to your annual business overheads, then divide by the number of hours you can actually bill in a year. The key is to use billable hours, not total working hours, because admin, travel, quoting and unpaid time cannot be charged directly to a customer.

What is the difference between billable and working hours?

Working hours are every hour your business takes up. Billable hours are the ones you can actually put on an invoice. Quoting, travel, buying materials, bookkeeping and marketing are real work but usually cannot be charged as line items, so a full 40 hour week often contains only 25 to 30 billable hours.

Should my hourly rate include overheads?

Yes. Van costs, fuel, tools, insurance, phone, software and accountancy do not disappear just because they are not billed to a specific job. Spreading your total annual overheads across your billable hours ensures every hour you charge helps cover them, rather than eating into your take-home pay.

Why is my calculated rate higher than I expected?

Because only a fraction of your week is billable and your overheads have to be recovered from that smaller number of hours. Many tradespeople undercharge because they divide their target income by all their working hours instead of billable hours, then forget overheads entirely. A rate that looks high per hour is often just an honest reflection of the real cost of running the business.

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