Hourly Rate Calculator for Service Businesses

Add the income you want to earn in a year to your annual business expenses, then divide by the hours you can actually bill. That's your break-even rate. Divide by (1 − target profit margin) to get a rate that also leaves profit in the business.

Hours you're paid for — time spent cleaning in a customer's home. Driving between jobs, quoting, scheduling, buying supplies and bookkeeping are real work but usually aren't billed. Many solo service businesses can only bill a portion of the hours they work.

Enter the income you want to pay yourself before personal income tax. If you want to plan for self-employment tax as well, increase your desired income or expenses to cover it. This calculator doesn't give tax advice.

You can use the break-even rate (covers your pay and expenses) as your labor cost per hour in the cleaning estimate calculator. If you use the target rate instead, set a lower margin in the estimate so you don't add profit twice.