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Hourly Billing Rate Calculator

Interactive hourly billing rate calculator based on the Chamber of Crafts costing scheme. Labor costs, overheads, profit and risk at a glance.

The hourly billing rate is the price a trades business charges customers per working hour. It covers labor costs, overheads, owner salary, profit, and risk allowances and must generate enough to cover all operating costs and a reasonable return.

Based on the Chamber of Crafts costing scheme: total costs ÷ productive hours × (1 + profit% + risk%).

How do you interpret the result?

The calculated hourly billing rate is your minimum rate for covering all costs. If your current hourly rate is below this, you are working below cost. The net billing rate is your target price before VAT. Market conditions and customer mix determine whether it can be achieved.

Not included: material surcharge, subcontracted services, and project-specific line items.

Costing scheme (HWK)

Cost-covering

Total costs ÷ total productive hours

Price floor: covers all costs, no profit.

Net billing rate

Cost-covering × (1 + profit% + risk%)

Target price before VAT.

Gross billing rate

Net billing rate × 1.19

Invoice price incl. VAT.

Example: HVAC with 3 journeymen

  • Total costs/year≈ 220,000 EUR
  • Productive hours4,860 h
  • Profit + risk13 %

220,000 ÷ 4,860 × 1.13 = 51 EUR/h

≈ 51 EUR/h

Net billing rate (incl. profit and risk)

Frequently asked questions about the hourly billing rate

What is an hourly billing rate?

The hourly billing rate is the price a trades business must charge per productive working hour to cover all costs, make a profit, and secure a calculated risk allowance.

What is the difference between the cost-covering billing rate and the net billing rate?

The cost-covering billing rate is the price floor. It covers all costs, but no profit and no risk. The net billing rate additionally includes the profit and risk surcharge and is the actual charge-out price before VAT.

Why is owner salary always included?

Even if the master works productively, their livelihood must be covered. If they work productively, their salary goes into labor costs and they increase the billable hours in proportion to their productivity rate (for example 60%). If they do not work productively, their salary goes into overheads.

What are productive hours?

Productive hours are the hours that can actually be billed to customers. The calculator derives them transparently: contract hours minus sick leave gives attendance hours. From that, unproductive time (travel, setup, cleanup) is deducted. Typical figures are 1,200 to 1,500 productive hours per year.

Do cash discounts and rebates belong in the billing rate?

No. According to HWK Cottbus and Haufe, cash discounts and rebates belong in the quote price, not in the billing rate. The billing rate reflects self-cost plus surcharges.

How current are the employer social security rates?

The preset rates (pension insurance, health insurance, long-term care insurance, unemployment insurance) are current as of 2025. You can adjust them in the Adjust values section.

Can I use the calculator for multiple wage groups?

The calculator currently uses a single gross wage for all journeymen. For different wage groups, use the Excel template and adjust the wage rates individually.

Sources and further links

Sources

Further reading

Next steps

Once you know your hourly billing rate, you can check how much your warehouse is costing you on top. Or you can read the detailed guide to billing-rate calculation.

Go to the guideGo to the warehouse cost calculator
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