How much should I charge per hour if I’m self-employed?
The answer is rarely your desired wage multiplied by a simple markup. Your rate has to support the hours you cannot bill, your overhead, your own compensation, and the profit the business needs to stay healthy.
Start with productive hours
If you work 40 hours per week, that does not mean you can sell 40 hours. Quoting, driving, buying materials, scheduling, bookkeeping, cleanup, and callbacks consume part of your day.
For example, 5 productive hours per day × 5 days × 48 weeks = about 1,200 productive hours per year.
Add what the business must support
Include your desired owner income, annual overhead, employee/helper costs that are not already direct job costs, and the profit cushion you want the business to retain. Keep materials and subcontractors separate if they vary by job.
Why the number can look surprisingly high
A self-employed person may want to personally earn the equivalent of $40 per hour, but the business may need to produce far more than $40 per productive hour because some work time is not billable and overhead still has to be paid.
Flat-rate businesses can still use hourly math
You do not need to show customers an hourly rate. Use the productive-hour target privately to test flat-rate prices. If a $2,000 job has $600 in direct costs and takes 12 productive hours, it produces about $116.67 of contribution per productive hour.
Then compare with your real jobs
Your first target is a planning estimate. Track actual hours and costs so the next estimate reflects what work truly takes.
Calculate your own target
Use the free JJL Profit Checkup to estimate what your productive hours need to produce based on your own goals and costs.
Run the free checkup