What a handyman should charge an hour

A one-person trade that wants to clear $60,000 for the year, bills 25 hours in a working week across 48 weeks, and spends $12,000 keeping a van, tools, and insurance going, has to charge $68.23 an hour. Only $50 of that hour is pay. The remaining $18.23 leaves again before any of it arrives, whether or not the quote was priced for it.

Billable hours are the denominator, not worked hours

The reason a trade rate looks high next to a wage is that the two numbers divide by different things. A wage is spread over every hour on the clock. A rate is spread only over the hours a customer agreed to pay for.

Driving between jobs, standing in a supplier queue, writing quotes, three of which go nowhere for every one that lands, answering the phone in the evening, and invoicing on a Sunday are all real work and none of it is billable. A one-person trade putting in what feels like a full week usually bills 20 to 30 hours of it. At 25 hours a week over 48 working weeks that is 1,200 billable hours to carry an entire year, and every cost in the business has to be divided across those 1,200 hours rather than across 2,000.

Change nothing else and take the billable week up to 35 hours across 50 weeks, and the same person clearing $70,000 needs $55.15 an hour instead. More billable hours is the one lever that lowers a rate without lowering the pay behind it.

Where the rest of the hour goes

Two things stand between the rate charged and the pay kept, and they arrive at different times of the year.

Overhead is the yearly bill for being in business at all: the van with its fuel and servicing, tools and the ones that break, general liability insurance, a phone, licence fees, an accountant, storage. Spread $12,000 across 1,200 billable hours and it is $10 of every hour before anything else happens. It does not care how many jobs got done.

Self-employment tax is the second. It funds Social Security and Medicare, runs at 15.3 percent, and the IRS applies it to 92.35 percent of net profit rather than to the whole figure. Working backwards, a profit of about $69,873 is what leaves $60,000 standing after that tax, so the tax alone adds close to $10,000 to what the year has to bring in. Income tax is separate and comes out of the pay figure afterwards, which is why the pay field here is described as what gets cleared rather than what gets kept.

What the number leaves out

This rate covers pay, overhead, and self-employment tax, and nothing else. It does not carry income tax, health insurance bought privately, retirement saving, materials, or an allowance for a customer who never pays. It also holds no profit above the owner's own pay, which a business needs if it is ever going to replace a van or survive a quiet quarter. Read the result as the floor a quote has to clear rather than the number to put on the invoice.

Three trades, worked out

Side work at 12 billable hours a week over 44 weeks, wanting $18,000 for the year against $3,500 of overhead, comes to $46.33 an hour. The overhead is small, but so is the hour count, and 528 billable hours is not many to spread it over.

A full kit moves the arithmetic the other way. A van, tools, and insurance running $28,000 a year, 30 billable hours a week over 50 weeks, and $80,000 wanted, needs $80.78 an hour, or $484.65 for a billable day.

The comparison that settles most pricing arguments is against a wage. The Bureau of Labor Statistics puts median pay for general maintenance and repair workers at $49,590 a year in 2025, about $23.84 an hour. Clearing that same $49,590 while self-employed, on 25 billable hours a week with $12,000 of overhead, takes $58.12 an hour. That is roughly two and a half times the wage for the same money at the end of the year, and none of the difference is profit.

Common mistakes

1. Pricing from the wage earned as an employee doing the same work. That wage came with an employer paying half the Social Security and Medicare, and covering the tools, the van, and every hour spent away from a job.
2. Dividing the target by 40 hours a week. It puts the rate about a third below where it needs to be, and the shortfall shows up as a year that felt busy and paid badly.
3. Meeting self-employment tax at the first quarterly payment rather than at the quote.
4. Leaving out costs that arrive once a year. Insurance and licence renewals feel separate from daily work, which is exactly why they get missed.

If a customer is weighing a quote against putting somebody on the payroll instead, the other half of that comparison is what an employee costs an employer once payroll tax, insurance, and paid leave sit on top of a salary, which the employee cost per hour calculator on this site works out.