What to Charge an Hour to Make $140,000 a Year
Charge at least
$145.50 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 year140000 $
- 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$145.50 per hour
| Hours worked a year | 1,920 |
|---|---|
| Billable hours at 70% | 1,344 |
| Pay plus overhead to cover | $176,000.00 |
| Break even rate | $130.95 /hrat this rate you make zero profit |
| With 10% profit margin | $145.50 /hr |
| Day rate, 8 hours | $1,164.02 |
| Revenue this implies | $195,555.56 a year |
Billable share of the week compared
Billable percent is the whole game. Nothing else on this page moves the rate as far.
| Billable share of the week | Charge at least | Billable hours at 70% |
|---|---|---|
| 50% | $203.70 per hour | 960 |
| 60% | $169.75 per hour | 1,152 |
| 70% | $145.50 per hour | 1,344 |
| 80% | $127.31 per hour | 1,536 |
| 90% | $113.17 per hour | 1,728 |
What else matters here
A hundred and forty thousand of pay and $36,000 of overhead is $176,000 over 1,344 billable hours, which is $130.95 to break even and $145.50 with profit. That is $1,164.02 a day and $195,556 of revenue.
This page is about one person's hours, and that is the limit worth naming. Everything here assumes you are the only one billing, so the only ways up are the rate, the weeks, the hours and the billable share, and all four have hard ceilings.
A second person breaks the ceiling, and it is a different calculation rather than a bigger version of this one. What an employee costs is not their wage: it is the wage plus payroll taxes, workers compensation, liability, vehicle, tools and the hours of yours spent supervising them, which is what the labor burden calculator works out. What the business then charges for their time is a shop rate, not your rate, and the two are set by different arithmetic.
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 $140,000 a year?
$145.50 an hour at 1,344 billable hours a year, with $36,000 of overhead and 10 percent profit. Break even is $130.95.
Does this rate work if I have employees?
No. This page prices one person's hours. An employee's cost is wage plus payroll taxes, comp, liability, vehicle and tools, which is a labor burden calculation, and what you charge for their time is a shop rate set separately.
Is my pay the same thing as profit?
No, and mixing them is the most common reason a busy contractor has no money. 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.