How much should a contractor charge per hour?

It depends on your net income target, YEL income, overheads and billable hours. For example, for a €3,000/month net at a 25% tax rate and typical costs, you often need €45–60/hour excluding VAT. Calculate your own figure by entering your details.

Which overheads should the hourly rate cover?

Overheads include insurance, tools and equipment, vehicle and fuel, bookkeeping, software, phone and marketing. All of these must be covered by your invoicing. The higher your costs, the higher the hourly rate needed to reach the same net income.

For contractors · Hourly rate

Contractor hourly rate calculator

Work out how much you need to charge per hour to cover YEL, taxes, overheads and still leave your target net income. You get the rate excluding VAT and the price the customer sees including 25.5% VAT.

Required hourly rate

42 €/h

Hourly rate (excl. VAT)

To the customer: 53,26 €/h (incl. 25.5% VAT)

Required revenue

63 653 € / v

Earned income (pre-tax)

48 000 €

Income tax

12 000 €

YEL contribution

7 653 €

Overheads

8 000 €

Desired net income

€/kk

Estimated income tax rate

Find your rate on your tax card or prepayment decision.

YEL income

€/kk

Overheads / year

€/v

Billable hours / year

h/v

Age group

New entrepreneur (22% YEL discount)

An indicative estimate for a sole trader. Income tax is based on the rate you enter; YEL is calculated precisely. Limited-company taxation, the entrepreneur deduction and individual deductions may change the result.

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Related calculator

Calculate the entrepreneur's YEL contribution precisely from your YEL income.

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How the hourly rate is calculated

What makes up a contractor's hourly rate?

An hourly rate is not the same as a wage. On top of your net income it has to cover income tax, the YEL contribution and all your business overheads — insurance, tools, vehicle, bookkeeping and software. Only after that is there any margin.

The calculator starts from your desired net income and adds tax (at the rate you enter), the YEL contribution and overheads. That gives the required revenue, divided by your billable hours. Note that not all working hours are billable — quoting, travel and admin take time too.

The result is indicative: an entrepreneur's taxation depends on the company form (sole trader or limited company), the entrepreneur deduction and individual deductions. The YEL contribution, however, is calculated precisely from your YEL income. Use the figure as a starting point for pricing, not as an exact truth to the euro.

FAQ

Hourly rate — FAQ

How much should a contractor charge per hour?: It depends on your net income target, YEL income, overheads and billable hours. For example, for a €3,000/month net at a 25% tax rate and typical costs, you often need €45–60/hour excluding VAT. Calculate your own figure by entering your details.
Which overheads should the hourly rate cover?: Overheads include insurance, tools and equipment, vehicle and fuel, bookkeeping, software, phone and marketing. All of these must be covered by your invoicing. The higher your costs, the higher the hourly rate needed to reach the same net income.
Why is the hourly rate much higher than the wage I want?: Because the hourly rate must cover income tax, the YEL contribution and business costs on top of your wage, and not all working hours are billable. Quoting, travel and admin take unbilled time. That is why the billable hourly rate is clearly higher than the target net wage per hour.