ServiqHow much to charge per hour
Most people set their rate by checking what the guy down the street charges. The guy down the street may be losing money without knowing it. A reliable rate starts from your own costs and from how many hours you can realistically bill, not from a guess. Below is a complete worked example with every number checked, so you can redo it with yours.
The idea in one sentence
Your hourly rate is everything the business needs to take in each month, divided by the hours you can actually bill that month. Two parts of that math trip people up: what counts as a cost, and how many hours are truly billable.
Step 1: add up fixed business costs
Fixed costs are the ones you pay even in a slow month. The example below is a solo handyman and small-repair contractor:
| Monthly fixed cost | Amount |
|---|---|
| Truck (insurance, payment, maintenance) | $700.00 |
| General liability insurance | $120.00 |
| Tools and replacements | $250.00 |
| Phone, software, license, accounting | $180.00 |
| Business costs | $1,250.00 |
Check: 700 + 120 + 250 + 180 = 1,250. Then add what you want to take home. In this example that is $5,000 a month after taxes.
Variable costs (materials, fuel for a specific job, dump fees) stay out of the hourly rate. They change from job to job and go into each job’s price, as shown further down.
Step 2: turn take-home pay into the revenue you need
A self-employed person pays income tax and self-employment tax on profit, so $5,000 in your pocket means more than $5,000 of profit. Suppose you set aside 25% of profit for taxes (a placeholder; your real figure depends on your income, filing status and state, so ask your accountant):
- Profit needed before taxes: 5,000 ÷ (1 − 0.25) = 5,000 ÷ 0.75 = $6,666.67.
- Revenue needed: business costs + profit = 1,250 + 6,666.67 = $7,916.67 a month.
Step 3: count only the hours you can bill
Nobody bills eight hours a day. Time goes to driving, buying supplies, writing estimates, answering messages and chasing payments. In the example:
- 20 working days a month (after holidays, weather and gaps) × 8 hours = 160 hours.
- Of that, 55% is actual billed work: 160 × 0.55 = 88 billable hours.
That percentage is the number to measure in your own routine. Track two weeks of how much time goes to the job itself versus everything else. For many solo tradespeople it lands well below 60%.
Step 4: the rate, with a buffer
Divide the revenue you need by the billable hours: 7,916.67 ÷ 88 = $89.96 an hour. That is your break-even rate for this lifestyle. Notice how sensitive it is: in a slow month with only 60 billable hours, the same math gives 7,916.67 ÷ 60 = $131.94 an hour.
Then add a buffer for slow months, unpaid invoices and warranty callbacks. As a self-employed person, nobody pays you for sick days or vacation, so the buffer is where they live. If the buffer is 10% of the price, divide by 0.90, not multiply by 1.10:
89.96 ÷ 0.90 = $99.96, rounded to $100 an hour.
Check at $100: 88 hours × $100 = $8,800 of revenue. The buffer is 10% of that, $880, and the rest, $7,920, covers the $7,916.67 you needed (the few dollars are rounding). If you also charge sales tax, collect it separately and do not count it as revenue.
Hourly rate or flat price per job?
Charging by the hour is transparent, but the client does not know how many hours they will pay for. A flat price gives them certainty and rewards you for being fast. A practical rule:
- Hourly: troubleshooting, repairs with an unknown scope, or anything likely to hold surprises.
- Flat price: repeat jobs with a clear scope (replace a faucet, mount a TV, paint a room).
Even with a flat price, your hour is the base. Example: replacing a bathroom faucet.
| Part | Math | Amount |
|---|---|---|
| Labor | 2 h × $100.00 | $200.00 |
| Materials (faucet you buy) | $85.00 + 20% handling | $102.00 |
| Trip charge | flat, within your service area | $25.00 |
| Job price | $327.00 |
200 + 102 + 25 = 327. After a few similar jobs, compare real time against the 2 hours you estimated and adjust.
Trip charges, materials and minimums
- Drive time between jobs is already in the non-billable hours from step 3. Charging full hourly rate for travel on top of that only makes sense for a long trip outside your area, and only if you say so up front. Many pros use a flat trip fee instead.
- Mileage and fuel are variable. A rough way to price them is per mile; check the current IRS standard mileage rate as a reference. If your truck payment and insurance are already in fixed costs, do not charge them again per mile.
- Materials go on their own line at real cost plus a markup for sourcing, hauling and standing behind the product. Here is how to show that on an estimate.
- A minimum charge (for example, one hour) protects you from jobs where the drive costs more than the work.
Review the math, and sanity-check it
Redo the numbers every quarter, or whenever a cost changes (fuel, insurance, a new tool). Compare the result with what competitors charge in your area. If your math lands far above them, check whether you are counting too many hours as non-billable or whether costs can come down. If it lands below, you may be underpaying yourself. Remember that a higher rate goes down easier with a clear, professional estimate.
Where Serviq fits
Serviq does not set your rate for you, but it keeps the result: you save your services with a price and a unit (hour, job, day, square foot) and pick them from your catalog on each estimate instead of redoing the math. You can change an item’s price inside one estimate without touching the catalog, and documents you already sent do not change when you update your prices. It works offline, with no account.
Questions
What is a typical hourly rate for a handyman or contractor?
There is no single number. It depends on the trade, the region and your own costs, which is why the math starts from your monthly costs and your billable hours instead of an average.
Should I charge hourly or per job?
Hourly works for troubleshooting and unclear scopes. A flat price works for repeat jobs with a clear scope. In both cases, your hourly rate is the foundation.
Can I charge for travel time?
You can, if it is agreed and written on the estimate. Many pros use a flat trip fee, and avoid charging again for costs that are already in their fixed costs or non-billable hours.
How much should I set aside for taxes?
It depends on your income, filing status and state. The example uses 25% as a placeholder. A CPA can give you a real figure for your situation.
Save your prices in the Serviq catalog and build estimates in a few taps, with a professional PDF. Available for iPhone and Android.
