If you set your rate by copying a Facebook group or a big franchise TV ad, you are guessing. Your minimum hourly rate is a math problem: income goal, expenses, taxes, and how many hours you can actually bill. Everything else is marketing around that floor.
Minimum rate = (target take-home + annual business expenses + tax money you must set aside) ÷ annual billable hours
Estimates, material runs, driving, invoicing, empty slots, and warranty callbacks are real work that clients do not buy by the hour. Many solo pros bill 20–30 hours inside a 40–50 hour work week. Planning at 50–60% billable is safer than assuming every hour on the calendar is sold.
Example: $70,000 take-home + $25,000 expenses + $20,000 tax reserve = $115,000 you must generate. 48 work weeks × 25 billable hours = 1,200 hours. Minimum ≈ $96/hour before any extra profit buffer. Your posted rate can sit higher for market positioning; it should not sit under this floor unless you knowingly cut take-home or expenses.
If you have helpers, their wage is not your posted rate. Add payroll taxes, workers’ comp, and non-billable time to get a loaded cost per helper hour, then apply margin. Your own “wage” is inside the take-home goal above — do not forget to pay yourself in the model.
A day rate (hourly floor × realistic on-site hours) helps when a client wants you all day. Trip fees and one-hour minimums protect you on punch-list calls. Publish them on your website and quotes so policy is not a surprise. Seasonal slow months may need a higher effective rate or a savings buffer from busy months — same annual math, different cash-flow shape.
Market ranges tell you whether your floor is sellable in your ZIP code. They do not replace your floor. If the market will not bear your minimum, you need lower expenses, higher billable efficiency, different services, or a different market — not a silent discount on every job.
Hourly Rate Pro ($14) adds trade-specific rates, seasonal planning, and a printable rate sheet for customers.
Suppose you want $60,000 take-home, expect $18,000 in business expenses, and set aside $15,000 for taxes: you need about $93,000 of gross profit contribution from billed work (simplified). At 22 billable hours per week for 46 weeks, you have 1,012 billable hours. Floor ≈ $92/hour. If you only bill 18 hours weekly, the floor jumps past $110/hour. That is why “I’ll just work more” without tracking billable percentage rarely fixes underpricing.
Revisit the spreadsheet twice a year or when insurance, rent, or fuel spikes. A rate set in January can be wrong by August.
Track billable hours for two weeks with a simple notepad or phone timer. Most owners discover they bill less than they thought — and that discovery is the real start of a sustainable rate.
Once the floor is clear, decide whether you sell time, results, or packaged visits. The floor still holds; only the packaging changes.
Published rates vary widely by market — often $50–$125+/hr charged to the customer. Your minimum rate depends on your costs and billable hours, not the average.
Because only part of your week is billable. Travel, estimates, buying materials, bookkeeping, and empty slots all need to be covered by the hours you do bill.
A trip or service call fee protects you on small jobs and no-shows. Many pros charge a minimum labor amount equal to 1–2 hours.
Solo operators often bill 20–30 hours in a 40–50 hour work week. Using 50–60% billable is a safer planning assumption than 100%.