Guide
A four-step calculation, not a guess: start from $100k in your pocket, gross up for tax and overhead, then divide by hours you'll actually bill. Most solo trades land between $115 and $160.
To take home $100,000 a year running solo, most tradespeople need to charge somewhere between $115 and $160 an hour. Where you land in that range depends on your tax setup, your overhead, and how many hours you can actually bill in a year. Here's the working, step by step, so you can plug in your own numbers instead of trusting someone else's average.
$100,000 take-home means $100,000 you can spend, save or invest after tax and after every business cost has been paid. It is not your day rate times your hours, and it is not what shows up on an invoice. Most rate mistakes start here: people set a price off gross figures and then wonder why nothing is left at year end.
Before overhead, you need enough pre-tax profit to cover the tax bill and still leave $100,000. For a sole proprietor or single-member LLC in the US, a typical reserve for federal tax, state tax and self-employment tax runs 25-30% of profit, though this varies by state, entity structure and deductions. Confirm your actual rate with an accountant, but for planning purposes:
Pre-tax profit needed = take-home ÷ (1 − tax reserve rate)
This is the cost of running the business before you take a dollar of profit: vehicle, insurance, tools, software, marketing, licensing, bookkeeping. For a one-person operation this typically runs $18,000 to $35,000 a year, depending on your trade and how much equipment you carry.
| Overhead item | Typical annual range |
| Vehicle (loan/lease, fuel, maintenance) | $5,000 - $10,000 |
| Insurance (liability, tools, vehicle) | $2,000 - $5,000 |
| Tools and equipment replacement | $1,500 - $4,000 |
| Software, phone, CRM | $1,000 - $2,500 |
| Marketing and advertising | $1,500 - $4,000 |
| Licensing, permits, continuing education | $500 - $1,500 |
| Accounting and bookkeeping | $800 - $2,000 |
Add pre-tax profit and overhead together and you get required revenue. Using the mid-range figures from Step 2 and $28,000 overhead: $138,889 + $28,000 = $166,889 in revenue needed for the year. Across the wider range, most solo operators land between $151,000 and $178,000. Use the break-even calculator to work out your own overhead floor before you go further.
This is where most rate calculations go wrong. A full-time year is roughly 2,080 hours, but almost none of that is billable for a solo operator. Driving between jobs, writing quotes, chasing payment, admin, callbacks, slow weeks, holidays and sick days all eat into it. Realistic billable hours for a one-person trade business sit at 1,100 to 1,400 hours a year — roughly 55-65% of a working year, and that's for someone who runs a tight schedule.
Hourly rate needed = required revenue ÷ billable hours
Take a solo electrician targeting $100,000 take-home, a 28% tax reserve, $28,000 overhead and 1,400 billable hours a year:
Round that to $120/hour for a clean quoted rate. If billable hours drop to 1,200 because of a slower season or more admin, the same revenue target pushes the rate to $139/hour. Run your own tax rate, overhead and hours through the hourly rate calculator to get a number specific to your business rather than this example.
Small changes in hours, overhead or rework compound fast. Here's what each one does to the required rate, holding everything else at the baseline above ($166,889 revenue, 1,400 hours, $119/hour):
| Change | New rate | Difference |
| Baseline | $119/hr | — |
| 200 fewer billable hours (1,400 → 1,200) | $139/hr | +$20/hr |
| $10,000 more overhead ($28k → $38k) | $127/hr | +$8/hr |
| 5% callback/rework rate (unpaid hours eating billable time) | $125/hr | +$6/hr |
Callback work is easy to underestimate. If one in twenty jobs needs a free return visit, that's effectively 5% of your billable hours going unpaid — and it needs to be priced into every hour you do charge. Track this properly with the job profitability calculator so you know your actual callback rate instead of guessing.
Sometimes the maths says $145/hour and the going rate in your area is $95. You have three levers, and only three:
What you shouldn't do is quietly absorb the gap by working unpaid overtime. That just moves the shortfall from your invoice to your evenings.
The Small Business Operations Kit ($19) turns guides like this one into fill-in-once worksheets: rate card, quoting sheet, job costing, payment terms and follow-up templates. Built by the same people who write these guides.