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What should you charge per hour?
Three numbers decide it: what the hour costs in labour, what it has to carry in overhead, and what you want left over. The rate the guy down the road charges is not one of them.
Below the break-even rate you are paying for the privilege of doing the work. That is the one hard line in pricing.
Why you divide rather than multiply
To keep 15% of the price, you divide your cost by 0.85 — you don't add 15% to it. Adding 15% to a $69 cost gives $79.35, and 15% of $79.35 is only $10.35, which is 13% of the price. The gap looks small on one hour. Over 1,400 hours it's thousands of dollars, and it's the single most common arithmetic error in trades pricing. The markup vs margin guide covers it in full.
Charging one rate for everything is usually a mistake
A helper's hour and a licensed journeyman's hour don't cost the same, so they shouldn't be priced the same. Most contractors end up with two or three rates: a crew rate, a lead or licensed rate, and sometimes a service-call rate that's higher because the drive time and diagnosis are unbillable but real.
What if the market won't pay your number?
It happens, and it's information rather than a verdict. Usually one of four things is true: your non-billable time is high enough to fix operationally, your overhead has grown past what your volume can carry, you're competing on jobs that suit a lower-cost operation, or your quotes don't show enough for the customer to judge anything but price. The last one is the cheapest to fix — see what to include in an estimate.
What you should not do is quote below break-even to stay busy. Volume at a loss just gets you to the wall faster.
Questions contractors actually ask
Should I quote hourly or fixed price?
Quote fixed price to the customer, price it hourly for yourself. Customers want certainty; you need the hours underneath to be right. The estimate templates present a fixed price built from a scope the customer can read.
Do I use this rate for materials too?
No. This is the rate for time. Materials get their own markup to cover handling, delivery, waste and warranty risk — commonly 15–35% depending on the trade.
My rate came out higher than everyone local. Now what?
Check the inputs first, especially billable hours. If they hold up, you are seeing what your competitors' pricing actually earns them — which is often less than they think, and is why so many of them close.
How do I raise my rate on existing customers?
Change it on new quotes rather than mid-job, give it a start date, and don't apologise or explain at length. Good customers accept a rate; they argue with an excuse.
One file, every job, no re-deriving
The Vault's pricing calculator holds these three numbers permanently and prices each job off them — break-even floor on the left, target-margin price on the right, and ten trade estimate templates to send it in.
Pricing calculator, 10 trade estimate templates in Word, pre-written exclusions and terms, and the 10-minute pricing guide. One payment, no subscription, 30-day guarantee.