What should I charge for contracting?
Solo contractors carry real overhead — licensing, bonding, liability and vehicle insurance, tools, and a truck — before a single billable hour. This calculator starts at the income you want to bring home, layers your overhead and self-employment tax on top, and shows the labor rate your bids need to be built on.
| Gross revenue you need to bill | – |
| Business expenses | – |
| Self-employment tax (15.3%) | – |
| Federal income tax (est.) | – |
| State income tax (est.) | – |
| Retirement savings | – |
| Your take-home income | – |
For projects: estimate the hours the job will take, multiply by your hourly rate above, then add materials (with markup) and a 10–25% buffer for overruns.
Estimates use 2025 federal brackets, the standard deduction, and an approximate state rate. Local taxes, credits, and deductions beyond the standard deduction are not included. Not tax advice.
What to count as expenses
For contracting, annual business expenses typically include liability insurance and bonding, license renewals, truck payment/fuel/repairs, tool and equipment replacement, dump fees, phone, and bid software. Add up a full year of these — using a rough annual total is far better than entering zero and pricing your overhead at nothing.
Be honest about billable hours
Estimating, material runs, inspections, and callbacks are unbillable but unavoidable — most solo contractors bill 28–34 hours in a 45-hour week. Bid jobs at billable-hour rates and your unbillable time stops being free.
Contractor pricing FAQs
What is the difference between my hourly rate and my bid price?
Your calculated hourly rate covers labor only. A bid adds materials with markup (typically 10–25%), subcontractors with markup, permit costs, and a contingency. Labor hours × this rate is the floor a bid should never drop below.
How much should I mark up materials?
A 10–25% markup is standard. It covers procurement time, delivery coordination, returns, and the financing cost of buying materials before the client pays. Passing materials through at cost means doing that work for free.
Should I price differently for time-and-materials vs. fixed bid?
Fixed bids deserve a higher effective rate (often +10–20%) because you carry the risk of overruns. Time-and-materials shifts risk to the client, so the rate can sit closer to your calculated floor.