Contractor Hourly Rate Calculator
Work out exactly what to charge per hour as a UK contractor or sole trader — accounting for income tax, National Insurance, business overheads, and the time you can't bill.
2024/25 tax year · Updates live as you type
Your details
Excl. holidays
Most contractors bill 65–80% of their working hours. The rest goes on quotes, travel, admin, and unbilled callouts.
Buffer for unexpected costs, slow periods, and business growth.
Your recommended rate
£50.65/hr
£405.20/day · £69,898/year turnover
How it's calculated
- Working hours/year
- 1840 hrs
- Billable hours/year
- 1380 hrs
- Gross salary needed
- £51,413
- Income tax
- − £7,997
- National Insurance
- − £3,416
- Take-home pay
- £40,000
- Business overheads
- £8,000
- Profit buffer
- £10,485
- Total revenue needed
- £69,898
💡 Tips
If you're VAT registered, add 20% on top of your rate — you'll collect and remit that separately.
Materials and bought-in subcontractor costs are usually charged at cost + markup, not included in your hourly rate.
How to calculate your contractor hourly rate in the UK
Most UK contractors set their rates by copying what others charge — which often means undercharging significantly. The correct approach is to work backwards from what you actually need to earn, accounting for all the hidden costs of running a trade business.
The key things most contractors forget to include:
- Non-billable time — for every hour on site, you'll spend time quoting, travelling, chasing invoices, and doing admin. Most contractors only bill 65–80% of their working hours.
- National Insurance — Class 4 NI adds 9% on profits between £12,570–£50,270, plus 2% above. This is often overlooked when setting rates.
- Overheads — tool replacement, van costs, fuel, public liability insurance, employers' liability, phone, accountancy fees. For a typical tradesperson this is £6,000–£15,000/year.
- Profit margin — your rate should include a buffer for slow periods, equipment failure, and business investment. 10–20% is typical.
Use the calculator above to find your number, then compare it to what you're currently charging. If there's a gap, consider raising rates for new clients while keeping existing ones on current rates for a transition period.
Know your rate — now make sure you're charging it
WorkLane helps UK contractors create professional quotes and invoices in minutes, track job costs, and get paid faster.
Try WorkLane free for 30 days →