What to Charge an Hour to Make $300,000 a Year
Charge at least
$277.78 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 year300000 $
- 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$277.78 per hour
| Hours worked a year | 1,920 |
|---|---|
| Billable hours at 70% | 1,344 |
| Pay plus overhead to cover | $336,000.00 |
| Break even rate | $250.00 /hrat this rate you make zero profit |
| With 10% profit margin | $277.78 /hr |
| Day rate, 8 hours | $2,222.22 |
| Revenue this implies | $373,333.33 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% | $388.89 per hour | 960 |
| 60% | $324.07 per hour | 1,152 |
| 70% | $277.78 per hour | 1,344 |
| 80% | $243.06 per hour | 1,536 |
| 90% | $216.05 per hour | 1,728 |
What else matters here
Three hundred thousand of pay plus $36,000 of overhead is $336,000 over 1,344 billable hours, which breaks even at exactly $250.00 an hour and prices at $277.78. That is $2,222.22 a day and $373,333 of revenue.
The round break even is a coincidence worth using, because $250 an hour is easy to hold in your head and easy to test against reality. Ask whether anything you do is bought at that price by the hour, and in a home service trade the answer is almost always no.
Which means the lever is not the rate. At this end of the ladder income comes from the number of people billing, from work that is sold by the project at a price nobody converts back to hours, or from something that earns without your hours at all: a service agreement book, equipment that rents, training other contractors, or a product. The calculator still has a job here, and the job is to tell you when you have run out of road on hourly pricing.
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 $300,000 a year?
$277.78 an hour at 1,344 billable hours a year, with $36,000 of overhead and 10 percent profit. Break even is exactly $250.00.
Is $300,000 realistic from an hourly rate?
Not from your own hours in a home service trade. It comes from more people billing, from project pricing that is never converted back to hours, or from income that does not depend on your hours at all.
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.