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Tradesman hourly rate calculator

Most people set their rate by taking the money they want and dividing by 40 hours a week. That number is always too low, because you do not bill 40 hours. Quoting, driving, fetching materials and chasing money are all unpaid. This works backwards from what you want to take home, adds your real overheads, and divides by the hours you can actually bill.

£a year

What you want to end up with, after tax.

£a year

Van, fuel, insurance, tools, phone, accountant, software, pension. Everything the business pays before you do.

%

A working assumption, not a tax calculation. Ask your accountant for your actual figure.

a year

52 minus holiday, bank holidays and the week you get flu. 46 is realistic.

a day
a day

The number that matters. Driving, quoting, buying materials and chasing invoices are not billable.

Charge at least
£44.01 / hour

Labour only, before materials and before VAT. This is the floor, not the price.

Revenue you need a year
£55,667
Billable hours a year
1,265

That is 61% of the hours you actually work. Anything over about 70% is unusual for a one-van firm.

If you had divided by hours worked
£26.89 / hour

The common mistake. It ignores every unbillable hour and is why so many trades work flat out and still feel skint.

How the sum works

  1. Gross up your take-home for tax. If you want £35,000 in your pocket and set aside 25%, the business needs to make £46,667 of profit.
  2. Add every overhead. Van, fuel, insurance, tools, phone, accountant, software, pension. Say £9,000. Now you need £55,667 of revenue.
  3. Count billable hours, not hours worked. 46 weeks, 5 days, 5.5 billable hours is 1,265 hours a year, not the 2,070 hours you are actually away from home.
  4. Divide. £55,667 over 1,265 hours is about £44 an hour. Divide by hours worked instead and you would get about £27, which does not cover the year.

Why billable hours change everything

Same person, same £35,000 target, same £9,000 of overheads, same 46 weeks. The only thing changing is how much of the day actually gets billed.

ScenarioBillable hours a yearUtilisationRate you need
Bill 8 hours a day1,84089%£30.25
Bill 6.5 hours a day1,49572%£37.24
Bill 5.5 hours a day1,26561%£44.01
Bill 4 hours a day92044%£60.51

Billing 8 hours of a 9-hour day is an 89% utilisation rate. Almost nobody running their own van achieves that, and pricing as though you will is how firms end up working every Saturday to stand still.

The unbillable hours are the real problem

Raising your rate is one answer. The other is billing more of the day, and that is mostly an admin problem rather than a working one. Quotes that write themselves from a price book, invoices that go out from the van instead of on Sunday night, and chasers that send themselves all buy back billable hours without working longer.

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Common questions

What should a self-employed tradesperson charge per hour in the UK?

There is no single right number, because it depends entirely on your overheads and how many hours you can actually bill. The method matters more than the answer: take the pay you want, gross it up for tax, add every business cost for the year, then divide by billable hours rather than hours worked. For a one-van firm wanting £35,000 take-home with £9,000 of overheads and 5.5 billable hours a day, that works out around £42 an hour.

Why can I not just divide what I want to earn by 40 hours a week?

Because you do not bill 40 hours. Quoting, driving between jobs, collecting materials, chasing invoices and paperwork all take time nobody pays you for. Most working one-van trades bill somewhere between 4 and 6 hours of a 9-hour day. Dividing by hours worked instead of hours billed is the single most common reason a busy trade still feels broke.

Should my hourly rate include materials?

No. This is a labour rate. Materials get priced separately, usually with a markup, and it is worth checking you know the difference between markup and margin before you set that. Adding 20% markup gives you a 16.7% margin, not 20%.

Does this include VAT?

No, and it should not. Work in figures excluding VAT. VAT is collected on behalf of HMRC and passes straight through, so including it would flatter your rate and leave you short. You must register for VAT once your rolling 12-month taxable turnover passes £90,000.

This is arithmetic, not tax or financial advice. The tax percentage is an assumption you set, not a calculation. Talk to your accountant about your own figures.

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