Result
- Billable hours per year
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- Pay + tax set-aside + costs
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- Break-even hourly rate
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- Half-day (4 hrs)
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- Full day (8 hrs)
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- Example: $100 of materials billed at
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Rate = (pay + tax set-aside + business costs) / billable hours / (1 - profit margin). The tax set-aside is a simple percentage you choose - check your real obligations with a tax professional.
Why your hourly rate is higher than your wage
A common mistake for new handymen is to take an employee wage they're happy with and charge that per hour. But as a business owner you're paid only for billable hours - time on a client's job - while you also spend unpaid time quoting, driving, buying materials, invoicing and fixing your truck. On top of that, you pay for your own insurance, tools, vehicle, phone and advertising.
break-even rate = (pay + tax set-aside + business costs) / billable hours
hourly rate = break-even rate / (1 - profit margin)
Be honest about billable hours
The number that changes your rate the most is billable hours per week. If you work 45 hours but 15 of them are driving, estimating and shopping, you have 30 billable hours. Count a few real weeks before you settle on this number, and remember holidays, sick days and slow seasons in weeks worked per year.
List every business cost
Add up a year of liability insurance, vehicle costs and fuel used for work, tool purchases and repairs, phone, software, licenses, advertising and accounting. If you don't know, look at last year's bank statements; it's usually more than people expect.
Add profit on purpose
Profit is not the same as your pay. A margin on top builds a cushion for slow months and lets you replace equipment without debt. Margin is calculated on the price, so a 15% margin means 15% of what the client pays is left after your pay, taxes and costs.
Materials are separate
This rate covers labor. Bill materials separately; many trades add a markup to cover the time spent sourcing, picking up and handling them, plus returns. The example line shows what $100 of materials would be billed at with your markup.
Hourly rate vs. job pricing
Some clients like hourly billing; others want a fixed price. You can use your hourly rate to build fixed prices: estimate the hours, multiply by your rate, add materials, and round up. The profit margin calculator helps you check a fixed price before you send it.
FAQ
How much should a handyman charge per hour?
Enough to cover the pay you want, taxes, your business costs and a profit margin, spread over the hours you can actually bill. Use the calculator with your own numbers; rates vary a lot by location, skills and demand.
What are billable hours?
Hours spent working on a client's job that you can charge for. Driving between jobs, quoting, shopping for materials and bookkeeping usually aren't billable, so billable hours are lower than total hours worked.
Should I charge a minimum for small jobs?
Many handymen charge a minimum such as a half-day or a set number of hours, because travel and setup take time even for a five-minute fix. The half-day line gives you a starting point.
Does this calculator work for other trades?
Yes. The math works for any service business that sells time, including cleaning, lawn care, painting and pressure washing.