What to Charge an Hour to Make $110,000 a Year
Charge at least
$120.70 per hour
48 weeks, 40 hours a week, 70% of them billable, $36,000 of annual overhead and 10% profit.
How that number is worked out
These are the figures this page was built with and every line the calculator produces from them. Change anything above and all of it moves.
- What you want to earn a year110000 $
- Annual overhead: truck, insurance, phone, office, software36000 $
- Weeks you actually work48
- Hours a week on the tools40
- Percent of those hours you can bill70 %
- Profit on top, as a margin10 %
Charge at least$120.70 per hour
| Hours worked a year | 1,920 |
|---|---|
| Billable hours at 70% | 1,344 |
| Pay plus overhead to cover | $146,000.00 |
| Break even rate | $108.63 /hrat this rate you make zero profit |
| With 10% profit margin | $120.70 /hr |
| Day rate, 8 hours | $965.61 |
| Revenue this implies | $162,222.22 a year |
Billable share of the week compared
Pay and overhead are both divided by the billable hours, so the billable share moves the rate at every level of pay.
| Billable share of the week | Charge at least | Billable hours at 70% |
|---|---|---|
| 50% | $168.98 per hour | 960 |
| 60% | $140.82 per hour | 1,152 |
| 70% | $120.70 per hour | 1,344 |
| 80% | $105.61 per hour | 1,536 |
| 90% | $93.88 per hour | 1,728 |
What else matters here
A hundred and ten thousand of pay plus $36,000 of overhead is $146,000 over 1,344 billable hours. Break even is $108.63 and the rate is $120.70, which is $965.61 a day and $162,222 of revenue.
The useful way to see it is in pay rather than in percent: moving from $120.70 to $128.97, which is under seven percent, is the difference between this page and the $120,000 example in the hourly rate calculator's table. Under seven percent to the customer is ten thousand dollars of pay to you.
What this calculator assumes
- Billable percent is the whole game. Estimating, driving, buying material, chasing payment and answering the phone are all real hours that no customer pays for. 70 percent is optimistic for a one man operation.
- Profit is separate from your pay. Your pay is a cost of the business. Profit is what the business earns for carrying the risk, and it is what funds the next truck.
Questions people ask
What hourly rate do I need to make $110,000 a year?
$120.70 an hour at 1,344 billable hours a year, with $36,000 of overhead and 10 percent profit. Break even is $108.63.
How often should I recalculate my hourly rate?
Every year, because overhead tends to grow quietly while revenue is assumed to have grown faster.
Is my pay the same thing as profit?
No. Your pay is a cost of the business, the same as a wage you would pay somebody else. Profit is what the business earns for carrying the risk, and it is what buys the next truck.
The hourly rate calculator takes any dimensions you like and hands back the same list.
Other common sizes
20 more sizes are answered on the hourly rate calculator page