Most contractors set their hourly rate by checking what the guy down the street charges. That is a guess, not a number. This calculator gives you a real one, based on what it actually costs to run your business and what you want to take home.
Every input has a guidance toast under it. They are open by default. Hide any you do not need.
What counts as overhead: Every dollar you spend to keep the business running whether you work a job that day or not.
Typical ranges (Philadelphia metro, 2026):
Guessing at overhead is the single biggest reason contractors underprice. Our professional Break-Even Calculator walks you through every line item, truck, insurance, fuel, tools, software, licensing, the works, so the rate you charge is built on real numbers.
This is what you want in your pocket after self-employment tax. Federal and state income tax come out after that, so think of this as the number that funds your life: mortgage, groceries, kids, savings.
Realistic anchors (solo contractor, Philadelphia metro, 2026):
If you want $80,000 in your pocket after self-employment tax, the business needs to gross roughly $94,500 just for you, on top of all overhead. The calculator handles the math.
The single most common pricing mistake. Contractors plug in 2,080 hours (40 hours times 52 weeks) and price as if every working hour is billable. It is not.
Where 2,080 work hours actually go:
Realistic billable hours:
Default of 1,100 is a safe starting point for a solo contractor.
Self-employment tax is 15.3% on net self-employment earnings: 12.4% for Social Security plus 2.9% for Medicare. As an employee, your employer paid half. As your own boss, you pay both halves.
This is ON TOP OF federal and state income tax. First-year contractors get blindsided by this every spring. Your federal and state income tax is a separate hit on whatever is left after self-employment tax.
The default 15.3% is correct for almost every solo contractor. Only change it if your accountant has told you to use a different number. Note: this calculator factors only self-employment tax. Income tax is on you to plan for separately.
Break-even keeps you alive. Profit builds the business. Your break-even rate covers overhead and pays you. Profit margin is what funds growth, equipment replacement, slow seasons, retirement, and the cushion that lets you sleep at night.
Industry standard targets:
If you skip profit margin, you are running a job, not a business. Default of 20% is a reasonable starting point.
Material markup is not greed. It is paid work. When you mark up materials, you are charging for the time and risk of sourcing, ordering, picking up, handling, returning, and warrantying everything you install.
What material markup covers:
Industry standard:
Charging materials at cost is a losing game. A 10% markup does not cover your time. Default of 40% is the middle of the standard range.
Your hourly rate sets every price you charge. Our Flat Rate Price Books take your number and price 280 to 324 services per trade automatically. Change your hourly rate on the Settings tab, the entire catalog recalculates.
Add your annual overhead to the income you want to take home (grossed up for self-employment tax), then divide by your billable hours per year. That is your break-even rate. Add a profit margin on top to get the rate you should actually charge.
Solo contractors in the Philadelphia metro area in 2026 typically need an effective billable rate between $150 and $325 per hour depending on trade, with electrical and HVAC at the higher end and carpentry at the lower end. The right number for you depends on your overhead, take-home goal, and how many hours you can actually bill.
Most solo contractors bill between 1,000 and 1,200 hours per year, not 2,080. Drive time, estimates, callbacks, paperwork, ordering materials, and dead time between jobs all eat into billable hours. Pricing as if you can bill 40 hours a week every week is the most common reason contractors underprice their work.
Material markup covers the time you spend sourcing, ordering, picking up, handling, returning, and warrantying materials. It also covers your risk on damaged or wrong items. Industry standard markup is 35 to 50 percent. Charging materials at cost or with a small 10 percent markup means you are losing money on every job.
Break-even rate is what you need to charge to cover overhead and pay yourself your target take-home. Recommended rate adds a profit margin on top. Break-even keeps you alive. Profit lets you replace equipment, weather slow seasons, grow the business, and save for retirement.