How to Set Your Hourly Rate

For a self-employed handyman, a 40-hour working week is not 40 billable hours. Estimates, driving, supply runs, invoicing and callbacks eat a big share of it. Many one-person shops bill closer to 25 hours a week. Write down your honest number — everything else depends on it.

Total your yearly overhead:

• Truck payment, fuel, insurance, maintenance
• Liability insurance and bonding
• Licenses, permits, dues
• Tools, replacements, consumables
• Phone, software, accounting
• Health insurance and self-employment tax

Rate = (Pay you want + Yearly overhead + Profit) ÷ Billable hours Example: Take-home target $70,000 Overhead $24,000 Profit (10%) $ 9,400 -------- Total needed $103,400 Billable hours (25/wk × 46 wks) = 1,150 $103,400 ÷ 1,150 = $90/hr

The $70,000 pay target, $24,000 overhead, and 1,150 billable hours in the hourly-rate example are placeholders — swap in your own. The point is that your rate is an output of your costs, not a number you pick to sound competitive.

A two-hour minimum (or a flat trip charge) protects you from twenty-minute jobs that cost an hour of driving. State it up front, before you get in the truck, and nobody argues about it later.

You paid for the supply run, the receipt, and the warranty risk. A markup on materials is standard practice — pick a percentage, apply it consistently, and list materials as their own line on the invoice so the total never looks arbitrary.

• Hourly — unknown scope, repairs, troubleshooting, old houses.
• Flat — jobs you've done a hundred times. Customers prefer a number, and you keep the upside when you work fast.

Whether billing handyman work hourly or at a flat rate, put the rate, the minimum, and the materials markup in writing before the work starts. See our payment terms guide for the exact wording.

Hi Dave — heads up that starting October 1 my rate goes to $90/hr. Costs have gone up across the board and I'd rather tell you straight than cut corners. Anything already quoted stays at the old price.

Should I charge for drive time? Many handymen build it into a minimum charge or a trip fee rather than billing it by the minute. Pick one approach and state it before you arrive.

What about jobs that take less than an hour? A handyman minimum charge covers jobs that take less than an hour. A 20-minute job still costs you the drive, the setup, and a slot in your day.

Do I charge the same rate for every task? Some handymen charge more for specialized or risky work, such as tile, electrical fixtures, or roof access. If you do, list those rates up front so there are no surprises.

How do I check if my rate is competitive? Look at what local handymen and small contractors publish, but set your price from your own costs first. Being the cheapest only works if the math still pays you.

State your handyman hourly rate plainly before the job starts and put the rate in writing: "My rate is $X per hour with a one-hour minimum. Materials are billed at cost plus a markup." Clear terms up front prevent the most common handyman dispute — a customer surprised by the final bill.

The handyman hourly-rate calculation uses sample numbers — replace the pay target, yearly costs, and billable hours with yours. Say you want to earn $60,000 a year for yourself, and your yearly costs (truck, fuel, insurance, tools, phone, software, licensing) come to $20,000. That's $80,000 you need to bring in.

If you work 48 weeks and can bill about 25 hours a week once you subtract driving, quoting, supply runs, and paperwork, that's 1,200 billable hours. $80,000 divided by 1,200 hours is about $67 an hour just to hit your targets. Add a profit margin for slow months and equipment replacement and you land well above that.

Most new handymen guess a number based on what feels fair. Doing this math once shows why a rate that sounds high to customers is often the minimum that keeps you in business.

• Pricing from a competitor's number instead of your own costs.
• Counting every working hour as billable — driving and quoting aren't.
• Forgetting insurance, tool replacement, and vehicle wear.
• Never raising your rate as costs go up.
• Skipping a minimum charge, so short jobs lose money.

Recheck your handyman hourly rate, costs, and billable hours at least once a year, especially after a jump in fuel, insurance, or material costs.