Most undercharging in the trades is not generosity, it is arithmetic nobody ever did. Your charge-out rate has to carry the wage, the van, the insurance, the software, the apprentice's slow days and the hours nobody pays for, and then leave a margin, and it has to do all of that inside the only thing you sell: a billable hour. The calculator below does the sum properly. It runs entirely in your browser and nothing is sent anywhere.
The calculator
Charge-out rate calculator
The 25 percent loading on the wage covers the employment costs that never appear on a payslip: leave, public holidays, payroll taxes and the unavoidable downtime between jobs. If you know your true loading, adjust the mental model accordingly; 25 percent is the conservative floor for most countries, not the ceiling.
Why billable hours are the number that matters
The brutal ratio in every trade business is worked hours to billable hours. A 40 hour week yields 25 to 30 billable hours once travel, quoting, supplier runs and admin take their share, and every non-billable hour raises the rate the billable ones must carry. That is why the calculator asks for billable hours honestly rather than contracted hours optimistically, and why the single fastest way to lower the rate you need is not cutting overheads but recovering an hour a day of admin. Wage benchmarks for your trade and country are published by statistics agencies such as the US Bureau of Labor Statistics; your charge-out rate should never be compared to a wage, only to a fully loaded cost.
Reading your result
If the rate the calculator shows is above what your market tolerates, you have three levers and only one of them is price: raise billable hours per person, lower overheads, or accept a thinner margin knowingly rather than accidentally. Most businesses find the first lever is the loose one. Travel order, job batching by area and less office-to-field phone tag routinely recover 3 to 5 billable hours per person per week, which drops the required rate by more than most owners expect; run the numbers again with 32 billable hours and watch.
That recovered time is, transparently, the business case for scheduling software: tighter runs, less phone tag, invoices that draft themselves at sign-off. Our crew capacity calculator shows the same effect from the jobs-per-week angle, and the SKEDS Starter plan is free if you want to test the effect on one crew rather than trust a calculator.
The mistakes that keep rates underwater
Three errors account for most underwater rates. The first is benchmarking against the competitor's sticker price without knowing their model; the outfit charging ten dollars less may be running newer vans on better routes with a higher billable ratio, or may simply be going broke slower than you. The second is treating the owner's wage as optional. If the business only makes money because you pay yourself last, the calculator should say so; put a market salary for your own hours into the wage field and let the rate carry it, because a business that cannot afford its owner is a job with extra steps.
The third is ignoring the mix. An hour of quoted work, an hour of do-and-charge and an hour of warranty callback all cost the same but earn very differently, and a healthy rate on paper can hide a sick mix in practice. Track the split for a month; if callbacks are eating more than a few percent of field hours, the fix is process and evidence, photos and sign-offs on every job, before it is price.
Frequently asked questions
Should apprentices have their own charge-out rate?
Yes. Run the calculator per role: an apprentice has a lower wage but also fewer billable hours and more supervision drag, so their true rate is closer to a qualified tradesperson's than owners expect.
Do I charge the same rate for quoted and do-and-charge work?
The rate is the same; the risk is not. Fixed-price quotes should carry a small premium or contingency because you now own the estimating risk. Never let a fixed price imply a discount on your hourly cost.
How often should I recalculate?
Twice a year, and immediately after any insurance, fuel, wage or rent change. A rate set in 2023 and untouched since is almost certainly underwater on 2026 overheads.
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Key takeaways
- Your rate must carry loaded wages, overheads and margin inside billable hours only.
- Be honest about billable hours; 25 to 30 of a 40 hour week is typical.
- Recovering an hour a day of admin lowers the required rate more than cost-cutting.
- Recalculate twice a year; overheads move even when your price list does not.
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