True Labour Cost Calculator for Trades
This true labour cost calculator works out what one chargeable hour really has to cover. You might work eight hours in a day, but quoting, travelling, collecting materials and paperwork mean only part of it can be charged.
Your target earnings
Days you cannot charge for
Time worked but not directly chargeable
Include time the business has to pay for, even when it cannot be added directly to a customer invoice. All figures are hours per week.
Based on your answers, approximately 80% of your available working time can be charged directly to customers.
Annual business overheads
Your overheads must be recovered through the hours you can actually sell, not every hour you work.
Profit and contingency
You may be available for 1,776 hours each year, but based on your answers only 1,421 of those hours can be charged directly to customers. Your labour rate has to recover your earnings and overheads through those 1,421 hours.
Where each labour hour goes
| Your target earnings | £31.67 |
| Business overheads | £11.23 |
| Contingency | £1.29 |
| Business profit | £4.91 |
| Recommended customer rate | £49.09 |
The cost of using the wrong hours
Spread across every hour worked, your overhead is £8.98 per hour. Spread across the hours you can actually charge for, it rises to £11.23 per hour.
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Leave an honest Google reviewReviews are optional. Please only review based on your genuine experience.Your working day costs more than your hourly wage
Your labour rate has to cover far more than the time spent fitting, repairing or installing.
The invisible labour gap
A four-hour job rarely uses only four hours of the business.
A job may include four hours of fitting time — but that is not the only time it uses. You may also have:
The fitting time is visible on the job. The rest is easy to overlook — this difference is the invisible labour gap.
The calculator includes this time so your charge-out rate reflects how the business actually operates, rather than an ideal working week.
What the calculator shows you
Once you enter your working pattern and business costs, you will see:
Real chargeable hours
The estimated hours each year that can be charged directly to customers.
Billable percentage
The share of your available working time that produces chargeable labour.
True labour cost
The amount each chargeable hour needs to recover before profit is added.
Minimum sustainable rate
The hourly rate required to cover earnings, overheads and contingency.
Recommended charge-out rate
The customer labour rate after your chosen business profit margin.
Suggested day rate
The equivalent rate for a full chargeable day.
Why dividing by 40 hours often gives the wrong answer
Adding up annual costs and dividing by a 40-hour week assumes every hour can be sold.
A simple example
How the same costs produce very different rates depending on the hours you divide by.
The business needs to recover £67,000 through those 1,200 chargeable hours — a true labour cost of about £55.83 per chargeable hour before contingency and profit.
Dividing the same cost across all 1,750 available hours would give only £38.29 per hour. The lower figure looks more competitive, but it assumes every working hour can be added to a customer invoice.
This is an example only. Your result will depend on your working pattern, costs and required profit.
£45,000
£22,000
1,750
1,200
What should be included in your labour overheads?
Include the annual costs the business must recover through its work.
Cost, markup and margin are not the same
Your selling rate needs to sit above your true labour cost. There are two common ways to add profit.
This calculator uses profit margin — the customer rate required for your chosen percentage of the final price to remain as profit after costs are covered.
Markup
Markup adds a percentage to the cost. A £50 cost with a 20% markup becomes £60.
Margin
Margin measures profit as a percentage of the final selling price. A £50 cost at a 20% margin becomes £62.50.
Your standard rate is only the starting point
Your standard rate covers the business. Some jobs still need an allowance for the site itself.
Use the result as a pricing baseline
The calculator is not designed to price every job automatically. Use the result as a baseline for:
Watch: why the install time isn’t the full labour cost
A short guide to the full labour chain — the time a job creates before, during and after the work on the tools — and why pricing only the install is what leaves trades underquoting labour.
Keep the price connected to the job
FieldHive lets you save labour fit times, material costs and markups so they can be reused when building quotes. The quote then stays connected to the customer, booking and invoice instead of being rebuilt at each stage.
Price the whole job, not just the hour
Use these alongside your true labour cost.
Trade Business Overhead Calculator
Work out the overheads your labour rate has to recover.
Add overheads →Free tools for the job
Put these numbers to work — free FieldHive tools, no sign-up.
Quote & Estimate Builder
Build a professional quote or estimate — line items, VAT and a valid-until date.
quote the job →Billable Hours Calculator
Work out how many hours a year you can actually bill, before you set a rate.
derive your billable hours →CIS & VAT Invoice Generator
Construction invoices with the VAT reverse charge and CIS deduction handled correctly.
invoice the labour →Trade Job Pricing Calculator
Build a job price up from labour and materials.
build the full job price →Timesheet Generator for Trades
Total a worker's week, allocate the hours to a job and see the labour cost.
log the hours on a timesheet →Video: Stop Underquoting Labour
Watch why trades underprice labour and how to build an hourly rate that covers its true cost.
watch: pricing labour →Frequently asked questions
Quick answers to the questions people ask most.
Price the job with the numbers connected
FieldHive keeps the enquiry, quote, job, invoice and payment connected — so the figures you work out here carry through instead of being retyped.
