TradeCalculator.co.uk
Hourly Rate Calculator
Work out the hourly rate you need to charge to hit your income target
Enter your target pre-tax trading profit (what you want left after overheads, before income tax/NI). This tool sums target + overheads and divides by billable hours - it does not gross-up for income tax/NI. To turn a post-tax net take-home target into the gross figure needed here, run it through the Self-Assessment or take-home calculator first.
Profit as a share of your selling price (gross = base ÷ (1 − margin)). Capped at 95% - a 100% margin is unattainable because it would mean zero cost. A healthy sole-trader margin is 10–20%.
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How We Calculate This
Frequently Asked Questions
Most tradespeople manage 1,400-1,700 billable hours per year. This accounts for travel time, quoting, admin, and days without bookings. Full-time employed hours would be around 1,880 (47 weeks × 40 hours), but self-employed billable hours are always lower.
Commonly forgotten costs include: tool replacement and calibration, vehicle MOT and servicing, training and certification renewal, software subscriptions, phone and broadband, workwear and PPE, waste disposal, and marketing/advertising.
A healthy profit margin for a sole trader is 10-20% on top of costs and target income. This provides a buffer for unexpected expenses, quiet periods, and business growth investment. Below 10% leaves little room for error.
If you are VAT-registered (mandatory above £90,000 turnover), you must add 20% VAT on top of your rate. The calculator shows both ex-VAT and inc-VAT figures. Remember, VAT collected is not your income - it belongs to HMRC.
Self-employed rates should be 30-50% higher than employed hourly equivalents to cover: no paid holidays, no employer pension, no sick pay, business overheads, and the risk premium of self-employment.
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Last updated: March 2026
Verified against UK standards · estimates only, confirm with your supplier.