Why is the recommended rate so much higher than what I currently charge?

Most service business owners are charging based on competitor rates, not their actual cost structure. If you're undercharging, this calculator surfaces the gap. Common reasons: not accounting for taxes, underestimating overhead, or assuming you're billable 40 hrs/week (you're not).

What's a realistic billable-to-paid hours ratio?

For field service: 60-75% is typical (28-30 billable of 40 paid). The rest is travel, admin, estimating, callbacks, training. For trades like HVAC or plumbing it can drop to 50% on emergency-call days.

Should I include subcontractor payments in monthly expenses?

No. Subcontractors are job costs, not overhead. They scale with revenue. Use this calculator for your overhead (truck, insurance, office, tools, software, marketing, phone). Use the Service Pricing Calculator to handle per-job material/sub costs.

What if I have employees, not just myself?

This calculator focuses on owner hourly rate. For per-tech labor pricing, use the Service Job Pricing Calculator and use this tool to find your owner billout rate, then mark up labor costs separately.

Why 30% tax rate by default?

Typical for U.S. sole proprietors: ~15% self-employment tax + federal income + state income often lands around 28-32% effective. If you're an LLC taxed as S-corp it can be lower (the SE tax only applies to your salary, not distributions). Adjust to your actual situation.

Free tool

Hourly Rate Calculator

Figure out exactly what to charge per hour to hit your income target after expenses, taxes, and time off.

Try the calculator Start free trial

Free forever, no signup needed, results update instantly

Most service business owners undercharge because they price by gut. This calculator works backward from your real income goal: subtract weeks off, business expenses, taxes, and a profit margin, then divide by your actual billable hours to get the rate you need to charge. Built for solo operators, contractors, electricians, plumbers, cleaners, and any service business owner who wants to stop guessing.

No signup, no email

Updates instantly

Built for service businesses

Shareable link to your scenario

Quick startPick your industry to load real-world numbers

Your inputs

Edit any field, results update automatically.

Desired yearly take-home income

What you want in your pocket after taxes, not gross.

Billable hours per week

Most field service techs only bill 25-30 hrs of their 40-hr week (driving, admin, prep don't bill).

Weeks off per year

Vacation + sick + holidays + slow weeks. Most owners take 4-6 weeks total.

Monthly business expenses

Insurance, vehicle, fuel, tools, software, phone, marketing, etc.

Effective tax rate

Self-employment tax + federal + state. Default 30% is typical for sole proprietors.

Target profit margin (above what you pay yourself)

Healthy service businesses target 10-20% profit on top of owner pay.

Your results

Recommended hourly rate

$129

Hits your income target with profit margin built in

Break-even rate (no profit)$110

Bare minimum (survival)$84

Monthly revenue target$14,146

Weekly revenue target$3,612

Annual revenue target$169,748

In healthy range

$75-175/hr is the healthy range across most US service trades. Premium markets (HVAC + electrical in major metros) push higher.

BLS data + Smarfle owner survey 2026

Track every billable hour in Smarfle

Built-in time tracking on every work order, auto-pulls billable hours into your invoice, and reports show your actual realized rate vs target. See if you're hitting your number or leaking time.

Save this in Smarfle CRM

Free for 14 days, no credit card

How this calculation works

The calculator works backwards from your take-home goal: 1. Add taxes back in to get the gross amount your business needs to pay you 2. Add yearly business expenses (monthly × 12) 3. Apply your target profit margin on top: that's your annual revenue target 4. Divide by total billable hours per year (weeks worked × billable hours/week) The "break-even" rate is what you need just to cover expenses + your owner pay (no profit). The "minimum" rate is a survival number: only enough to keep the lights on at 70% of your target income. The biggest mistake most owners make: assuming 40 billable hours/week. Reality is closer to 28-32 once you subtract driving, admin, estimating, callbacks, and downtime. The default reflects that.

Real scenarios

Find the persona closest to yours, then click to load those numbers into the calculator.

HVAC tech with own truck

$90K take-home target, $3,500/mo overhead (truck + insurance + tools), 28 billable hrs/week.

Needs ~$98/hr to hit target. Most owners in this profile charge $75-85, leaving $30K+/year on the table.

Solo cleaner, residential

$55K take-home target, low overhead, 32 billable hrs/week.

$50-60/hr does it for residential cleaning. Higher leverage comes from team expansion, not raising solo rates.

Plumber, mostly emergency

$95K target, lower billable hrs (26/week) due to drive time + emergency dispatch.

Needs $115+/hr to hit target. Emergency premium pricing (1.5-2x base) is essential, not optional.

Smarfle CRM

Run this in your business, not just in a calculator

These Smarfle features close the loop on what this tool surfaces. Built for local service businesses, used by HVAC, plumbing, electrical, cleaning, lawn care, and 40+ other trades.

Feature

Time Tracking

Track every billable minute on every work order, then see your realized rate vs. your target on the reports dashboard.

Learn more

Feature

Payment Links + Invoicing

Auto-pull tracked time into invoices at your set hourly rate. No more lost billable hours.

Learn more

Feature

Workflow Automation

Auto-invoice the moment a job is marked complete. Tracked hours flow straight into the bill, no re-keying.

Learn more

Frequently asked questions

More free tools

Service Job Pricing Calculator

Calculate the right price for any service job. Covers labor, materials, overhead, and your target profit margin.

Service Business Break-Even Calculator

Find the monthly revenue you need to cover all costs, plus what it takes to pay yourself a real wage.

Technician Productivity Calculator

Audit your team's billable utilization, effective hourly rate, and per-tech profit. Find the underperformers fast.

Ready to put this into practice?

Smarfle CRM helps local service businesses book more jobs, get paid faster, and grow on autopilot. Florida-based, same-day support, 14-day free trial.

Start your free trial