Question 1

How do I know what to charge as a contractor?

Accepted Answer

Start from what you need to earn, not what competitors charge. Add up your target take-home pay plus business expenses (tools, insurance, gas, materials markup), divide by the hours you can actually bill in a year, then add a profit margin on top. That's what this calculator does.

Question 2

Should I charge by the hour or by the job?

Accepted Answer

Most tradesmen quote by the job once they know their real hourly cost — customers prefer a fixed number, and it protects you from working slower than estimated. Use the hourly rate this calculator gives you to price jobs, not necessarily to bill by the hour.

Question 3

What's a good profit margin for tradesmen?

Accepted Answer

Most service businesses target 15-30% on top of costs and desired pay, to cover slow weeks, bad debt, and equipment replacement. Higher-risk or highly-skilled trades (electrical, HVAC) often run toward the higher end.

Question 4

How do I raise my rates without losing customers?

Accepted Answer

Existing customers rarely leave over a reasonable increase (5-15%) if you give notice and the work quality hasn't changed. New customers never see your old rate at all — raise it there first.

Question 5

Does this calculator account for taxes?

Accepted Answer

No — this estimates your business's hourly rate before income tax. Set aside a separate percentage (talk to a tax preparer about your specific situation) from what you collect for your quarterly/annual taxes.