What to Charge an Hour to Make $65,000 a Year
Charge at least
$83.50 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 year65000 $
- 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$83.50 per hour
| Hours worked a year | 1,920 |
|---|---|
| Billable hours at 70% | 1,344 |
| Pay plus overhead to cover | $101,000.00 |
| Break even rate | $75.15 /hrat this rate you make zero profit |
| With 10% profit margin | $83.50 /hr |
| Day rate, 8 hours | $667.99 |
| Revenue this implies | $112,222.22 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% | $116.90 per hour | 960 |
| 60% | $97.42 per hour | 1,152 |
| 70% | $83.50 per hour | 1,344 |
| 80% | $73.06 per hour | 1,536 |
| 90% | $64.94 per hour | 1,728 |
What else matters here
Sixty five thousand of pay with $36,000 of overhead is $101,000 across 1,344 billable hours. Break even is $75.15 an hour and the rate is $83.50, or $667.99 a day.
Health insurance is the biggest single line an employee never sees and the one most often left out of the overhead figure here. A job comes with a plan the employer mostly pays for. Self employed, you buy it on the open market at the full price, and a family plan is commonly the largest bill the business pays after the truck.
It belongs in overhead, not in pay, because it is a cost of being in business rather than money you get to spend. Add $12,000 of premium to the $36,000 default and the rate goes from $83.50 to $93.42. If the comparison you are really making is between this and a job that came with benefits, that ten dollars an hour is most of the honest answer.
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 $65,000 a year?
$83.50 an hour at 1,344 billable hours a year, with $36,000 of overhead and 10 percent profit. Break even is $75.15.
Does health insurance go in overhead or in my pay?
Overhead. It is a cost of running the business rather than money you take home, and leaving it out is what makes self employment look better on paper than it is. Adding $12,000 of premium moves this page from $83.50 to $93.42.
Is 70 percent billable realistic?
For a one man operation it is optimistic. Estimating, driving, buying material, chasing payment and answering the phone are all real hours nobody pays for. Many solo contractors land between 50 and 60 percent. The comparison table on this page shows what each level does to the rate.
The hourly rate calculator takes any dimensions you like and hands back the same list.