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Day rate and hourly rate calculator for contractors
Start from what you want to earn, add what the business costs to run, and spread it over the days you can really bill.
Add up a year's business costs and the pay you want, then divide by the days you can actually bill after holidays, admin and quiet weeks. Add your profit margin and you have your day rate. Divide it by the hours you work in a day for your hourly rate.
Get paid without chasing
Sam sends invoices and polite, automatic reminders for every unpaid one, including invoices from Xero, QuickBooks, FreeAgent and Sage.
Start freeHow it works
Break-even day rate = (pay you want + business costs) ÷ days you can bill
Day rate to charge = break-even day rate ÷ (1 − profit margin)
The margin is profit as a share of the price, so a 10% margin means 10p of every dollar you charge is profit after paying yourself and the costs. It pays for the quiet months, a new truck and growth.
Worked example
You want $60,000 a year and the business costs $12,000 to run. Over 220 billable days you break even at $327 a day. With a 10% margin you charge $364 a day, or $51.95 an hour over 7 billable hours.
The two common mistakes
- Too many days. There are about 250 working days in a year, but after holidays, quoting, admin, travel and quiet spells most contractors bill far fewer. Be honest here.
- Forgetting the costs. The truck, fuel, insurance, tools and phone cost money on the days you don't bill too.
Your result is a floor, not a price. Compare it with what others charge in your area and aim between the two. Quoting a callout? Use the call-out charge calculator.
Questions
Should I use a day rate or an hourly rate?
Use whichever your customers expect. Day rates suit longer jobs; hourly rates suit small jobs and repairs. Better still, price each job as a fixed quote and use these rates to check it.
Is the pay before or after tax?
Before tax. Put in what you want to draw from the business; your income tax comes out of that.
Should my rate include sales tax?
No. Work out your rate before tax, and add sales tax on top where your state requires it.
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