Contractor & Trade Operations
Contractor Overhead Recovery & Minimum Hourly Rate Engine
Determine your true cost of doing business per billable hour. Eliminate unbillable overhead drag, payroll burden, vehicle amortization, and target healthy commercial net margins.
Target Commercial Hourly Rate
$160.06/hr
Covers salary, taxes, full overhead recovery, plus a 20% corporate margin.
True Breakeven Hourly Floor
$128.04/hr
Billing below this floor guarantees an operational loss across your billable hours.
Standard 8-Hour Day Rate
$1,280
Requires $199,750 annual billings for target profit.
1. Target Compensation & Burden
Includes employer CPP/EI or FICA, Workers' Comp (WSIB), and basic liability.
Retained in company for cash reserves, growth, and equipment reinvestment.
2. Real Billable Hours Capacity
52 minus statutory holidays, personal time off, and sick leave.
Contractors average 55%-70%. Remainder goes to drive time, estimating, and bookkeeping.
Annual Billable Hours: 1248 hrs
Annual Non-Billable Overhead: 672 hrs
3. Annual Fixed Overhead ($)
Itemized Hourly Rate Build-Up
| Rate Component | Annual Cost ($) | Cost Per Billable Hour | % of Minimum Rate |
|---|---|---|---|
| Direct Labor & Owner Draw | $125,400 | $100.48/hr | 62.8% |
| Fixed Operating Overhead Recovery | $34,400 | $27.56/hr | 17.2% |
| Total Breakeven Cost Floor | $159,800 | $128.04/hr | 80.0% |
| Target Commercial Profit (20%) | $39,950 | +$32.01/hr | 20.0% |
Operating service vehicles or commercial trucks?
Ensure your vehicle write-off model matches CRA/IRS rules, or determine per-kilometer fuel and tire burn on heavy commercial units.