GENERAL CONTRACTOR
How to Set Your Hourly Rate as a Contractor
Turn your real costs into an hourly rate that covers overhead, leaves room for profit and still wins jobs.
Your hourly rate is the number that decides whether you build a career or just keep working. Set it too low and every job quietly loses money. Set it too high and you price yourself out of the work. The fix is to stop picking a round number and start calculating from your actual costs.
Charge for value, not just for hours
Customers do not pay for hours; they pay for solved problems and delivered results. But a fair rate still has to be built from your costs, or the result you deliver will quietly cost you more than you earn.
Know your full cost per hour
The rate you quote must first cover the true cost of the person doing the work. That is not just the wage: taxes, workers' compensation, insurance and benefits all sit on top. If you do not know that number, every quote is a guess.
Calculate the real rate with your crew numbers
Use the labor calculator with your typical crew size, hours, wage and payroll burden. The effective cost per hour it returns is the floor your rate cannot drop below and still pay for labor.
Add overhead and profit on top
The labor cost per hour is only field labor. Add your overhead per billable hour and the profit you want. Only then do you have a rate that keeps the business alive instead of just covering the crew.
- Cost per labor hour from the calculator
- Plus overhead per billable hour
- Plus your target profit
- Equals your minimum viable hourly rate
Test it against the market and adjust
Once you have a calculation-backed rate, compare it with what your market pays. If your minimum rate is above what customers will pay, the answer is not to silently absorb the loss — it is to raise value, tighten efficiency or target better clients, so the math works at a price someone will actually pay.