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Labor Rate Calculator: What Should You Charge per Hour?
An hourly rate calculator for contractors. It turns a tech's wage, 2026 employer payroll taxes, overhead and your target margin into the rate to charge. Fasite is all-in-one, operations-first software for home service businesses.
Trade presets are query parameters, for example HVAC, plumbing and electrical. Published by Fasite. Questions: support@fasite.org.
Sets the wage when BLS publishes a median. Other leaves the wage blank.
No default until you pick a trade that has a BLS median, or type your own wage.
2,080 is 40 hours times 52 weeks. Arithmetic, not a statistic.
Drive time, shop time and callbacks aren't billable. No suggested percentage.
Required. Look up the rate at your state unemployment insurance agency. No default.
Required. No default. The same agency publishes the wage base.
Required. No default.
Starts at 0. Type your own figure.
Required. Truck, fuel, insurance, software, office, marketing. No default.
Required. Must be below 95. No default.
Fill in the billable percentage, state unemployment rate and wage base, workers' comp, overhead and target margin. Those fields have no default.
FUTA here uses the full 5.4% credit. In a credit-reduction state the credit is smaller, so FUTA costs more. IRS Topic 759. Social Security and Medicare: IRS Topic 751.
Median pay by trade (BLS, May 2025)
Fetched 2026-10-22 from the Occupational Outlook Handbook. These are medians, not a rate you should charge.
| Trade | Occupation | Median hourly pay |
|---|---|---|
| Electrician | Electricians | $30.38 Source |
| Plumber | Plumbers, pipefitters, steamfitters | $30.67 Source |
| HVAC | Heating, AC and refrigeration mechanics and installers | $29.33 Source |
| Roofer | Roofers | $26.65 Source |
| Landscaping | Landscaping and groundskeeping workers | $18.82 Source |
| Cleaning | Janitors and building cleaners | $17.71 Source |
2026 employer payroll taxes
- Social Security: 6.2% of wages up to $184,500. IRS Topic 751.
- Medicare: 1.45% of wages, no wage cap. The employer has no additional Medicare share. IRS Topic 751.
- FUTA: 0.6% of the first $7,000 per employee. That is 6.0% minus the maximum 5.4% credit. The credit is reduced in credit-reduction states. IRS Topic 759.
Margin vs markup
The price is your cost per billable hour divided by 1 minus your target margin. Markup is that price divided by the cost, minus 1. The calculator shows both from the margin you type. It does not use a sample margin.
Worked example
Hypothetical example, not industry data. The breakdown in the calculator is the worked example: every dollar in it is a number you typed, a BLS median you selected, or one of the labelled 2026 payroll constants above. Overhead is whatever you enter. This page does not supply an overhead figure.
Questions about the rate.
Employer Social Security at 6.2% of wages up to the 2026 wage base, Medicare at 1.45% of wages with no wage cap, and FUTA at 0.6% of the first portion of wages. That FUTA rate is 6.0% minus the maximum 5.4% credit. The credit is smaller in credit-reduction states, so FUTA can cost more than this calculator shows. State unemployment and workers' comp use the rates you enter. IRS Topic 751 and IRS Topic 759 are the sources for the federal figures.
Drive time, shop time and callbacks are not billable, and the share that is billable is yours to enter. This page does not suggest a typical percentage.
Target margin is profit divided by the price you charge. Markup is profit divided by your cost. The rate to charge is your cost per billable hour divided by 1 minus the margin. The markup percent is that price divided by the cost, minus 1. The box under the result uses the margin you typed.
Median hourly pay by trade from the BLS Occupational Outlook Handbook, May 2025, fetched on 22 October 2026. Choosing Other leaves the wage blank. Paid hours per year start at 2,080, which is 40 hours times 52 weeks. That is arithmetic, not a published statistic.
There is no default. Enter the rate and the taxable wage base from your state unemployment insurance agency. Benefits per tech start at 0 until you enter a figure. Overhead and the technician count are yours too.
Sources & method
Published by Fasite. Questions: support@fasite.org. Every default on this page comes from a source below. A field with no default is one you fill in.
- U.S. Bureau of Labor Statistics, Occupational Outlook Handbook, median hourly pay by trade (May 2025). Wage defaults in the trade menu. Each trade row links to its own handbook page. Fetched 2026-10-22.
- IRS, Topic 751, Social Security and Medicare withholding rates (2026). Employer Social Security is 6.2% up to the wage base. Employer Medicare is 1.45% with no wage cap, and the employer has no additional Medicare share.
- IRS, Topic 759, Form 940, Employer's Annual Federal Unemployment (FUTA) Tax Return (2026). FUTA net rate of 0.6% (6.0% minus the maximum 5.4% credit) on the first portion of each employee's wages. The credit is reduced in credit-reduction states.
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