How I Price Any Job: The Hourly-Rate Formula With Overhead Built In
The pricing formula I use for every side job: start from target take-home, add self-employment tax, overhead, and vehicle costs, divide by the hours you can actually bill, and stop pricing off what feels fair.
Educational, not financial advice. Man Bucks publishes worked examples built from researched US prices. Every number here is an example, not a promise — prices and pay rates move, so run your own math before you spend, quote a job, or change how you earn. Read the full disclaimer.
Every hustle article on this site — washing, mowing, handyman work — eventually hits the same wall: what do I charge? And almost everyone answers it the same wrong way: find three competitors on Facebook, pick a number slightly under theirs, and hope. That's not pricing. That's copying the homework of a guy who also didn't do it.
Here's the formula I use instead. It takes twenty minutes with a calculator, it works for any service job, and it explains something that confuses every new operator: why the established guys charge nearly double the newcomers — and stay booked.
The formula
Charge-out rate = (target take-home per hour + overhead per billable hour) ÷ (1 − your tax share) … then job price = rate × honest hours + materials × 1.15, with a minimum job charge underneath it all.
That's compressed, so let's build it up the way I actually do it, with a worked example: say I want handyman-type work to pay me $30/hour take-home — real money I keep after everything.
Step one: gross up for the tax you now pay yourself. Self-employment tax is 15.3% on net earnings, on top of income tax, and no employer is paying half of it anymore — the math lives at the IRS Self-Employed Individuals Tax Center, and the plain-English version is in my side-hustle tax breakdown. Between SE tax and income tax, a conservative planning number is 25–30% of net headed to taxes. To keep $30, I need roughly $41–$43 of net profit per hour.
Step two: add overhead per billable hour. Overhead is everything the customer never sees: insurance at $50–$90/month, gear wearing out (amortize the startup ledger over its life), consumables, phone, software, and the vehicle — the IRS's 2026 standard mileage rate is 72.5 cents per mile, which is a decent proxy for what driving really costs even before you deduct it. For a lean weekend operation, overhead typically lands at $6–$12 per billable hour. Call mine $9. Now I need about $50–$52 coming in per billable hour.
Step three: divide by the hours you can actually bill. The step everyone skips. A six-hour Saturday of "work" contains quoting, driving, loading, unloading, restocking, and invoicing — for most solo service guys only 55–70% of working time is billable. If I only collect money on 60% of my hours, the other 40% has to ride along on the billable ones: $51 ÷ 0.6… no — careful, this one bites both directions. If my $30 target was for every hour I spend (the honest version), then the charge-out rate is $51 ÷ 0.60 = $85/hour. If the target was only for on-the-job hours, $51 stands, and I've quietly agreed to work the drive time free.
That chart is the whole article. When a new guy charges $40/hour, the taxes still get paid and the truck still burns gas — the only segment that can shrink is his own. He's not undercutting the market. He's undercutting himself, and he finds out in April.
From rate to price
I quote job prices, not hourly rates — customers hate watching a meter, and a rate rewards slow work anyway. The rate stays in my pocket as the pricing engine:
Estimate honest hours, including the fixed 30–45 minutes of setup-teardown every job carries. This is why small jobs need a minimum charge — mine would be $85–$100 — because a "twenty-minute job" is ninety minutes of your Saturday once the drive is counted. It's the same fixed-cost logic as route density in mowing: distance and setup are real costs, and jobs that can't carry them don't get cheaper, they get declined.
Materials cost plus ~15%. The markup isn't padding — it covers the sourcing trip, returns, and the wrong part you eat once a month. Pass big materials through at documented cost on larger jobs to keep trust.
Then sanity-check against the market, in that order. If your formula price sits way above the going rate, your overhead is heavy or the market is telling you this service doesn't pay — both worth knowing before you're booked solid at a loss. Sitting well under market? Raise the target; the formula computed your floor, not your ceiling. And market rate means what established, insured operators charge — not the $99-anything guy, who is running out of business in real time and taking his customers' expectations with him.
Quoting it without flinching
The formula's last enemy is your own voice on the phone. Three habits make formula prices land. Quote in writing, fast. A same-day text with scope, price, and available dates reads as professional; a mumbled range reads as an opening bid. Offer a good-better option, not a discount. "Basic patch and paint: $180. Patch, texture-match, and full-wall repaint: $320" moves the conversation from whether your price is fair to which fair price they want — and a surprising share pick the bigger one. Never defend the number line by line. The customer doesn't itemize their plumber's overhead; the moment you start justifying, you're negotiating against yourself. "That's my price for doing it right, and I stand behind it" — then quiet — closes more work than any explanation ever has.
And when demand says raise prices, raise them on new customers first, existing ones on 60 days' notice, and grandfathering your first few loyal accounts a season longer than strictly optimal. The spreadsheet doesn't capture what a customer who refers three neighbors is worth, but you should.
The recalibration loop
Run this after every 10 jobs
- Total actual collected dollars, actual all-in hours (drive included), actual materials and overhead spend.
- Compute the real take-home hourly: (collected − costs − tax reserve) ÷ all-in hours.
- Compare against your target. Under by 20%? Your hour estimates are optimistic — quote longer, not cheaper.
- Flag which job types beat target and which dragged. Do more of the first list. Fire the second list.
- Raise prices on new quotes 5–10% when you're booked more than two weekends out — booked-solid is the market saying you're underpriced.
A note on materials-heavy quotes, because the formula can mislead there: on a job that's $400 of materials and three hours of labor, your rate applies to the hours, the markup applies to the materials, and mixing them — quoting "a day rate" that swallows the materials — either prices you out or eats your margin depending on which way you rounded. Keep the two engines separate on your worksheet even when the customer sees one number. And carry a written schedule of the jobs you quote most; after twenty quotes you'll know your real hours for a fence section or a faucet swap cold, and quoting from data instead of optimism is what separates year-two operators from year-one casualties.
Three questions I always get
"Won't I lose jobs at formula prices?" Yes — the jobs that were paying you $12/hour to own a business. Losing them is the raise.
"What if I'm new and slow?" Charge the formula rate and eat the extra hours quietly. Your inexperience is your cost, not the customer's discount — and it fixes itself by job ten.
"Cash jobs too?" The formula doesn't care how you're paid, and neither does the IRS — cash income is taxable income, so the 25–30% line stays in the math either way.