Contractor Hourly Rate Guide: How to Set a Real Billable Rate

If you searched 'how much should a contractor charge per hour', you are really asking whether your current rate is killing your business. This guide explains, in plain numbers, why your billable rate must be 2.5–3.5× your wage, how to build it from your own overhead and realistic billable hours, and how to use it as the foundation of every quote.

Average contractor hourly rates by trade (2026)

General contractor: $80–$150/hr. Electrician: $75–$130/hr. Plumber: $80–$130/hr. HVAC technician: $75–$120/hr. Roofer: $60–$100/hr. Carpenter: $60–$100/hr. Painter: $40–$70/hr. Flooring installer: $50–$90/hr. These are fully-loaded billable rates for established contractors in US markets — not wages. Your specific rate will depend on your overhead, local market, and target margin.

Wage vs billable rate: why they are never the same number

Your wage is what you pay yourself. Your billable rate is what the customer pays per hour — and it must cover unbillable time (admin, travel, estimates), overhead (insurance, vehicle, tools), employer taxes, and a profit margin on top. A contractor paying themselves $35/hr often needs a $90–$110/hr billable rate just to break even. The gap between wage and billable rate is where most contractors silently underprice every job.

How to calculate your contractor hourly rate step by step

Step 1: Set your target annual net salary. Step 2: Add all annual business overhead (insurance, vehicle, tools, licenses, marketing). Step 3: Estimate realistic billable hours per week (most contractors bill 25–30 of a 40-hour week). Step 4: Divide total annual costs by total billable hours for your break-even rate. Step 5: Add 10–20% profit margin on top. Use the EstiDash hourly rate calculator to run your exact numbers.

Worked example: solo remodeling contractor and 3-person crew

Solo contractor: $60,000 salary + $18,000 overhead ÷ 1,300 billable hours = $60/hr break-even. Add 15% profit = $69/hr minimum charge-out rate. Three-person crew: $180,000 wages + $45,000 overhead ÷ 3,900 billable hours = $57.70/hr per person break-even. Crew rates must also account for the helper's lower productivity on complex tasks.

How to raise your contractor rate without losing clients

Give 30–60 days notice on rate increases. Frame the increase around cost inputs (insurance, fuel, materials) rather than personal income. Raise rates for new clients first, then existing ones. Small annual increases of 5–8% are far easier to absorb than a sudden 25% jump. Clients who leave over a justified rate increase were already marginally profitable.