Hours actually invoiced (Standard full-time is ~2000, usually 1500-1800 is realistic).
Markup added on top of breakeven costs.
Calculation Results
Breakeven Hourly Rate$0.00
(Covers wages, burden, and overhead only)
Suggested Charge Rate$0.00
Per Hour
Est. Annual Revenue$0.00
Est. Net Profit$0.00
function calculateConstructionRate() {
// Get inputs
var salary = document.getElementById('annual-salary').value;
var burdenPercent = document.getElementById('labor-burden').value;
var overhead = document.getElementById('annual-overhead').value;
var hours = document.getElementById('billable-hours').value;
var profitPercent = document.getElementById('profit-margin').value;
var errorDiv = document.getElementById('error-msg');
// Reset results
errorDiv.style.display = 'none';
// Validation
if (salary === " || burdenPercent === " || overhead === " || hours === " || profitPercent === ") {
errorDiv.textContent = "Please fill in all fields.";
errorDiv.style.display = 'block';
return;
}
var numSalary = parseFloat(salary);
var numBurden = parseFloat(burdenPercent);
var numOverhead = parseFloat(overhead);
var numHours = parseFloat(hours);
var numProfit = parseFloat(profitPercent);
if (numHours <= 0) {
errorDiv.textContent = "Billable hours must be greater than zero.";
errorDiv.style.display = 'block';
return;
}
// Calculations
// 1. Calculate Labor Burden Amount
var burdenAmount = numSalary * (numBurden / 100);
// 2. Total Labor Cost
var totalLaborCost = numSalary + burdenAmount;
// 3. Total Annual Cost (Labor + Overhead)
var totalAnnualCost = totalLaborCost + numOverhead;
// 4. Breakeven Hourly Rate
var breakevenRate = totalAnnualCost / numHours;
// 5. Final Rate with Markup
// Using Markup method: Cost * (1 + Margin%)
var markupMultiplier = 1 + (numProfit / 100);
var finalRate = breakevenRate * markupMultiplier;
// 6. Annual Totals for projections
var annualRevenue = finalRate * numHours;
var annualProfit = annualRevenue – totalAnnualCost;
// Display Results
document.getElementById('result-breakeven').textContent = '$' + breakevenRate.toFixed(2);
document.getElementById('result-final-rate').textContent = '$' + finalRate.toFixed(2);
document.getElementById('result-revenue').textContent = '$' + annualRevenue.toLocaleString('en-US', {minimumFractionDigits: 0, maximumFractionDigits: 0});
document.getElementById('result-profit').textContent = '$' + annualProfit.toLocaleString('en-US', {minimumFractionDigits: 0, maximumFractionDigits: 0});
}
How to Accurately Calculate Your Construction Hourly Rate
In the construction and trades industry, quoting the right hourly rate is the difference between a thriving business and one that barely breaks even. Many contractors make the mistake of simply copying their competitors or guessing a number that "sounds right." This calculator uses a "bottom-up" approach to ensure every hour you bill covers your wages, your business overhead, and generates a healthy profit.
Understanding the Components
1. Base Labor & Burden
Your rate starts with the desired annual salary for the skilled labor (whether that is you or an employee). However, you must add the Labor Burden. This includes FICA taxes, unemployment insurance, workers' compensation, and any benefits like health insurance. In construction, this burden typically ranges from 15% to 30% on top of the base wage.
2. Overhead Costs
Overhead includes all the expenses your business pays regardless of whether you are working on a job site or not. This is often the most underestimated category. It includes:
Vehicle payments, fuel, and maintenance
Liability and tool insurance
Tool replacement and depreciation
Marketing, website hosting, and software subscriptions
Office supplies and phone bills
To use the calculator, sum up these costs for the entire year.
3. Billable Hours
A standard work year is 2,080 hours (40 hours x 52 weeks). However, no contractor is billable 100% of the time. You must account for:
Travel time between sites
Material runs
Time spent quoting and invoicing
Sick days and holidays
Equipment maintenance
A realistic target for a highly efficient solo contractor is often between 1,500 and 1,700 billable hours per year.
Markup vs. Margin
This calculator applies a Markup percentage to your breakeven cost. If your cost to operate per hour is $50 and you want a 20% markup, you add 20% of $50 ($10) to the total, resulting in a $60/hr charge rate. This ensures that every hour billed contributes directly to your business growth fund.