Free tool · UK trades & sole traders
Hourly Rate Calculator — UK Trades & Self-Employed
Work out the minimum hourly rate you need to charge to cover your costs and hit your income target. Enter your annual costs, desired take-home, and realistic billable hours below.
Why setting the right hourly rate matters
Many UK tradespeople and sole traders set their rate based on what competitors charge or what feels reasonable — not on what they actually need to earn. The result is a rate that covers a good week but leaves nothing for a bad one.
A properly calculated hourly rate starts from the bottom up: your target income, your actual business costs, your realistic tax liability, and the hours you can genuinely bill — not a theoretical 40-hour week.
Billable vs non-billable hours: the number most tradespeople get wrong
A full working year is roughly 2,080 hours (52 weeks at 40 hours). But billable hours — time directly on customer work — are far lower. A realistic estimate for UK sole traders is 900–1,150 billable hours per year once you subtract:
- 4–6 weeks of holiday and bank holidays (160–240 hours)
- Sick days and personal time
- Admin: quoting, invoicing, chasing payments, emails, calls
- Travel time between jobs
- Material purchasing and supplier trips
- Seasonal quiet periods and gaps between bookings
Dividing your required annual income by 2,080 hours produces a rate far too low to sustain. The calculator uses realistic billable hours to give you an accurate minimum.
What to include in your annual costs
Your hourly rate must recover all business costs, not just your time. Common items tradespeople undercount: van finance or lease payments, van insurance, fuel and maintenance, public liability insurance, tool replacement, work clothing and PPE, phone contract, accounting fees, trade membership and certification renewals, and any software subscriptions.
Add these up for the full year and enter the total in the calculator. Even modest overhead — £8,000–£15,000 per year is common for a sole trader with a van — makes a significant difference to the correct hourly rate.
Hourly Rate Calculator (UK)
Most UK tradespeople and self-employed undercharge by 30–50%. Enter your real costs, billable hours, and target profit — we’ll work out what you should be charging.
Your costs & goals
Be honest. Vehicle, insurance, tools, software, accountant — all of it.
Van, fuel, tools, insurance, software, accountant, etc.
What you actually want in your pocket per year, after tax.
UK self-employed average is around 20–30%.
Billable hours
Only count hours you can actually invoice — quoting, admin and travel usually aren’t billable.
46 allows for holidays, admin, sick days and downtime.
Total billable hours: 1380 / year
Your minimum hourly rate
£37.50
per billable hour, ex VAT
Equivalent rates
- Day rate (8h)£300.00
- Weekly revenue£1,125.00
- Annual revenue needed£51,750.00
How we calculated it
- Gross up your £35,000 target profit by your 20% tax rate.
- Add your £8,000 annual business costs.
- Divide by 1380 billable hours per year.
💡 This is your floor. Add 10–20% for unexpected costs, slow months and customer-side risk.
Runs entirely in your browser — no signup required — built for UK sole traders and small service businesses.
How to calculate your hourly rate
The formula most tradespeople don’t use — but should:
- Add up all annual costs — van, fuel, tools, insurance, software, accountant.
- Set a realistic take-home income target.
- Gross up for Income Tax and Class 4 NI (typically 20–30%).
- Divide by realistic billable hours — not the theoretical 2,080.
Most sole traders can bill 900–1,150 hours a year once you account for holidays, quoting, travel and downtime. That gap is why undercutting feels comfortable but rarely ends well.
Once you know your rate, the next step is quoting jobs confidently and invoicing correctly.
Why most tradespeople undercharge
The most common mistake isn’t charging too little per hour — it’s forgetting what those hours actually cost.
- Forgetting admin and quoting time (often 5–10 hrs/week)
- Not accounting for travel between jobs
- Ignoring tax and NI when setting a “goal salary”
- Assuming all 52 weeks are fully billable
- Underestimating tool wear, vehicle costs and insurance
- No buffer for cancellations, slow months or callbacks
A good rule: once the calculator gives you a floor rate, add 10–15% for contingency. Running a tighter business with proper job management also cuts the non-billable hours you lose each week.
Typical UK trade hourly rates (2025–26)
Rates vary significantly by region, experience, overheads and whether materials are included. These are typical ranges — not guaranteed market rates.
£50 – £90/hr
£50 – £90/hr
Decorators
£25 – £55/hr
Handymen
£25 – £50/hr
£20 – £40/hr
£15 – £30/hr
London and South East typically run 20–40% higher. Always use your own costs and target income — not a benchmark — as the basis for your rate.
Common questions
Should I include VAT in my hourly rate?
No. If you're VAT-registered, your rate is quoted ex-VAT and VAT is added separately on invoices. If you're below the £90,000 threshold, VAT doesn't apply to your charges.
What's the difference between an hourly rate and a day rate?
A day rate is your hourly rate × working hours in your day (typically 8). Fixed-price jobs still rely on an internal hourly estimate — you're just quoting the total rather than the rate.
What counts as a billable hour?
Time directly on customer work — on-site labour, installations, repairs, sessions. Admin, quoting, supplier calls and travel are generally non-billable time you still need to cost in.
How many billable hours can I realistically work per year?
Most UK sole traders bill 900–1,150 hours/year. Subtract holidays, sick days, quoting time, travel, admin and seasonal downtime from 2,080 and the gap becomes obvious.
How do I calculate my rate if I want to go VAT-registered?
Your hourly rate stays ex-VAT — clients on standard pricing will pay your rate + 20% VAT on top. If your clients are mostly VAT-registered businesses, registration can be neutral. See our running a service business guide for more.
Once I know my rate, what next?
Quote it confidently with our quoting guide, invoice correctly using our free invoice generator, and track what job management software costs vs what it saves you.
Once you know your hourly rate — what next?
A rate you can defend is only half the equation. The other half is actually quoting at it consistently — without second-guessing yourself on every job.
Now actually charge it
WrkGenie helps UK trades and self-employed quote at the right rate, send invoices in seconds, and chase payments automatically. No spreadsheets, no faff.
Frequently asked questions
How do I calculate my hourly rate as a sole trader?
Add up your annual costs (van, insurance, tools, fuel, phone) and desired take-home income, then apply a tax buffer (typically 20–30% for basic-rate taxpayers). Divide the total by your realistic billable hours for the year — typically around 920–1,150 hours, not 2,080. That gives you the minimum you need to charge to break even and reach your target income.
Should I include VAT in my hourly rate?
No. If you are VAT-registered, your hourly rate is quoted ex-VAT and VAT is added separately on invoices. Rates in this calculator are ex-VAT. If you are not yet registered (below the £90,000 threshold), VAT does not apply to your charges.
What is a normal hourly rate for tradespeople in the UK?
Typical ranges vary widely by trade, region, experience, and whether materials are included. As a rough guide: electricians and plumbers often charge £50–£90/hr; decorators and handymen £25–£55/hr; cleaners £15–£30/hr; gardeners £20–£40/hr. London and South East rates tend to run higher. Use this calculator to work out the right rate for your specific costs and income target.
How many billable hours can I realistically work per year?
Far fewer than 52 weeks × 40 hours (2,080). A realistic figure for UK sole traders is 900–1,150 billable hours, once you subtract: 4–6 weeks holiday, sick days, admin and quoting time, travel, seasonal downtime, and cancellations. Overestimating billable hours is one of the most common reasons tradespeople undercharge.
Related tools and guides
- Day rate calculator — calculate your full-day rate
- Profit margin calculator — check whether a job was actually profitable
- Free invoice generator — create a professional UK invoice in minutes
- How to price a job (UK guide) — a full breakdown of job pricing for tradespeople