True Hourly Rate Calculator for Canadian Contractors

How this works out your hourly rate

There is no mystery in it. The calculator takes the year you actually work, strips out the parts you can't invoice, and divides what the business costs by what is left.

Start with the days. Five days a week across fifty-two weeks is 260 scheduled days. Take off the days you lose: vacation, statutory holidays, the week you had the flu, the days the site was frozen or under water. What remains is the days you are genuinely on the tools. Multiply by the hours you put in and you have the hours you work.

Then the hours nobody pays for. Quoting. Driving to the supplier and back. Chasing the invoice. Warranty callbacks. Those come out of the days you work, not off the top of the calendar, so we convert your weekly figure to a daily one and subtract it from the days you are actually out there. What survives is your billable hours. That's the number every other calculator asks you to guess.

Divide what the business has to cover by those hours and you have break-even, the rate at which the year pays for itself and nothing more. Divide break-even by one minus your target margin and you have your rate. That is a margin on the price, not a markup on your cost, and the two are not the same thing. A 12% margin on a break-even of $82.14 gives $93.34, and the $11.20 between them is 12% of the price and 13.6% of the cost.

Where a crew is on the books, the employer side of CPP and EI comes from the Canada Revenue Agency's 2026 rates and caps, and Quebec runs on Revenu Quebec's QPP, QPP2 and QPIP constants instead. Two things you confirm yourself, because we can't know them from here: whether pension contributions apply to that person at all, and whether CRA has approved a reduced EI multiplier for your plan. These annual formulas assume the employee works for this employer throughout the full calendar year; part-year cases must use the employer's payroll records and the flat-burden override.

The rest of the provincial lines ship blank on purpose: vacation pay, statutory holiday pay, your board's premium, an employer health tax where the province charges one. Your WSIB rate depends on your rate group, and we'd rather hand you an empty box to fill off your own statement than a confident number that is wrong for you.

Every field starts filled with an example so you can watch it work. Change every number to yours.

How much should I charge per hour as a contractor?

Whatever it costs you to be in business, divided by the hours you can bill, plus the margin you decide to make. There is no other honest answer, and anyone who hands you a number without asking what your year looks like is guessing.

The part almost everybody gets wrong is the divisor. A five-day, eight-hour year contains 2,080 hours. Nobody bills 2,080. Take off the holidays, the statutory days, a few sick days and whatever winter took, then take off the hours a day that go into quoting and driving, and what survives is a much smaller number. Run the example the calculator opens with and it comes out at 1,327. Divide by 2,080 instead and you have undercharged by about a third. That's the whole error, and it compounds quietly for years because it never shows up on any single job.

Questions people actually ask

How do I calculate my hourly rate?

Add up what you need to take home and what the business costs you for a year. Then work out how many hours you can genuinely bill in that year, not how many you work. Divide the first by the second and you have break-even. Decide what margin you want on top of that, divide break-even by one minus that margin, and you have your rate. The calculator above does all four steps as you type.

What is a good hourly rate for a contractor?

The one that covers your costs and leaves the margin you decided on. We don't publish average rates by trade and we're not going to. A Toronto electrician with a leased van and a shop carries a completely different cost base than a rural handyman working out of a garage, and an average of the two describes neither of them. A table of going rates also invites you to price against your neighbour instead of against your own books.

How many billable hours do contractors actually work in a year?

Fewer than they think. A five-day, eight-hour year is 2,080 hours on paper. Take off holidays, statutory days, sick days and weather, then the quoting, the supplier runs and the paperwork, and what is left is much smaller. We won't print an industry average: two outfits can share one calendar and still land 385 hours apart on unbillable time alone. Change the quoting hours above and watch it happen.

How do I calculate labour burden in Canada?

Take the wage, then add what you pay on top of it as the employer. Outside Quebec in 2026 that starts with 5.95% CPP on earnings between $3,500 and $74,600, another 4% on the slice between $74,600 and $85,000, and EI at 1.4 times the employee's 1.63% on insurable earnings up to $68,900. Those are CRA figures, but applicability differs by worker and an approved premium reduction can put the EI multiplier below 1.4, so the controls stay explicit. These annual formulas assume the employee works for this employer throughout the full calendar year; part-year cases must use the employer's payroll records and the flat-burden override. Quebec runs on QPP, QPP2, QPIP and its own EI rate. Vacation pay, statutory holiday pay, your workers' compensation premium and, in some provinces, an employer health tax sit on top of all of it. Those four we leave blank for you to fill from your own statements.

What is a charge-out rate?

The rate you charge the customer, as opposed to what the work costs you. The phrase is common in the trades and in accounting practices. It is the second of the two big figures at the top of the page: break-even is what an hour costs you, and charge-out is what you sell it for.

Why is the rate it gives me higher than what I charge now?

Usually because your billable hours are lower than you assumed, and sometimes because you have never put a margin on top of your own wage. Read where the hours went before you argue with the number. If the days lost or the unbillable hours look wrong, change them. It's your year, not ours. If they look right, then so is the rate, and the uncomfortable part is that it has probably been right for a while.

Does this include GST or HST?

No. Every figure here is before tax. If you are registered and the work is a taxable supply, charge GST or HST on top at the rate that applies where you make the supply. That money is never yours: you hold it in trust until you send it to the CRA.

Setting a rate you can say out loud

The rate is only half the job. The other half is defending it when somebody asks why you cost more than the guy down the road, and that gets easier when you can name the parts. Your van and your liability insurance cost the same whether you work 214 days or 170. The hour you spend writing a quote you don't win is paid for by the hours on the jobs you do win. A rate that pretends otherwise is a rate that runs out of road in February.

Two things are worth doing once you have the number. Print the rate card and keep it in the van, so the hourly, the half day and the day rate are one piece of paper instead of a calculation you have to redo under pressure. And come back when something changes: a truck payment, an insurance renewal, a helper, a fuel spike. Each of those moves a number the rate is built on, and redoing the arithmetic takes a minute.

This rate covers your labour, and only your labour. Materials are priced separately, and the markup you put on them is a different question with a different answer.

The number under the rate

The utilization figure on the year bar is the one worth staring at. It's the share of your scheduled year you can actually invoice, and the fastest way to raise it is almost never a higher rate. It's fewer empty days between jobs.

If your own figure came out lower than you expected, a listing in your trade and your province is a free place to start. We run this directory, and our join page puts it plainly: when we say free, we mean it. Customers pay you directly and we take no referral fee.

See how you rank in your trade

Or see who you are up against:

Working outside your usual city this year? Browse by province.

Other tools on this site

Deposit and payment schedule builder

You have the rate. This one is about getting paid on it.

Quote follow-up message generator

For when the quote went out and nothing came back.

Copy the link before you close the tab and your numbers ride along in it. Next time the insurance renewal lands, you change one figure instead of starting over.

What should I actually charge per hour?

Where the hours went

What the year has to cover

If winter takes more days