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Hourly rate calculator for service business owners

Work backward from what you want to take home. Add your overhead and a tax set-aside, divide by the hours you can actually bill, and see the rate you need to break even and the rate that also leaves a profit.

Estimates only. Not tax advice. The tax set-aside is a single percentage you choose to put aside from your pay. It isn’t a calculation of self-employment tax, income tax or any other tax you’ll owe, which depends on your situation. Ask a tax professional what to set aside. This calculator uses only the numbers you type; nothing is sent or saved.

1 · Your pay and time

Desired annual take-home pay ($) What you want to keep after your tax set-aside

Tax set-aside (% of your pay before the set-aside) Your own estimate, not tax advice. Ask a tax professional

Billable hours per week Hours you can charge for; not driving, quoting or admin

Weeks worked per year Leave out vacation, holidays, sick days and weather

Days worked per week Used for the per-day figure

2 · Monthly overhead ($ per month)

Insurance Liability, auto, equipment

Vehicle Payment or lease, maintenance

Fuel

Software Job app, bookkeeping, payroll

Phone

Supplies & small tools Anything not billed to a job

Other Marketing, licenses, storage

Blank overhead fields count as $0.

3 · Profit

Target profit margin (%) Profit for the business on top of your pay, as a share of the rate

Break-even hourly rate

–

Recommended hourly rate

–

Per day

–

Fill in the fields to see the math.

Put your rate into real quotes

Once you know your rate, a job app can carry it into every quote and invoice. Jobber Core is listed at $29/mo billed annually and QuoteIQ Essentials at $29.99/mo, for one user each (as checked Oct 10, 2026).

Try Jobber free →Try QuoteIQ free →affiliate link

Paying a crew? Gusto lists payroll from $49/mo + $6/mo per person. See Gusto → affiliate link

Starting out? See the simplest software setup.

The formula

Pay before set-aside = take-home ÷ (1 − tax set-aside %) Annual overhead = monthly overhead × 12 Break-even revenue = pay before set-aside + annual overhead Billable hours a year = billable hours per week × weeks worked Break-even hourly rate = break-even revenue ÷ billable hours a year Recommended rate = break-even hourly rate ÷ (1 − target profit margin %) Billable hours a day = billable hours per week ÷ days worked per week Per day = hourly rate × billable hours a day

The set-aside is treated as a share of your pay before it’s set aside, so a 25% set-aside on $50,000 take-home means earning $66,666.67. Profit margin is a share of the rate, not a markup: at 15%, $0.15 of every $1 billed is left after your pay, set-aside and overhead. This is a one-person view. If you have employees, their wages belong in a job-level calculator like our house cleaning, lawn mowing or pressure washing tools.

Worked example

You want to take home $50,000 and choose a 25% set-aside, so you need $50,000 ÷ 0.75 = $66,666.67 before the set-aside. Overhead is $150 insurance + $400 vehicle + $300 fuel + $60 software + $80 phone + $150 supplies = $1,140 a month, or $13,680 a year. Break-even revenue is $80,346.67. Billing 30 hours a week for 48 weeks gives 1,440 billable hours, so the break-even rate is $55.80 an hour ($80,346.67 ÷ 1,440). With a 15% target profit margin: $55.80 ÷ 0.85 = $65.64 an hour (using unrounded figures). Working 5 days a week is 6 billable hours a day: $393.86 a day at the recommended rate, or $334.78 to break even. At $65.64 an hour for 1,440 hours, revenue is about $94,525, leaving about $14,179 in profit after your pay, set-aside and overhead.

Next step: put your rate to work in a job price with one of our free pricing tools, or take the 5-question quiz to find job software that fits your budget. Setting up from scratch? See the simplest software setup for a new business.