What Should a Remodeling Pro Charge Per Hour?

Ask ten remodelers what they charge per hour and you will get ten different answers, and half of them are guessing. The problem with guessing is that it usually leaves money on the table or lands a job you lose money on. A real remodeling hourly rate is not a number you copy from the guy across town. It is a number you build backwards from the income you want to keep, the hours you can actually bill, and the overhead you have to cover whether the phone rings or not.

Start With the Income You Actually Want to Keep

Most pricing conversations start in the wrong place. They start with 'what does the market pay' instead of 'what do I need to earn.' Flip it. Decide the annual income you want to take home as the owner, then treat that as a fixed target the business has to hit.

Say you want to clear $90,000 a year for yourself. That is your personal draw, not the business revenue. Keep that number honest. If you low-ball your own pay, you will build a rate that keeps you broke and busy, which is the most common trap in this trade.

The Billable Hours Trap

Here is where most rates fall apart. There are roughly 2,080 work hours in a year if you count 40 hours across 52 weeks. You will not bill anywhere near that. You lose time to estimates, driving, material runs, invoicing, chasing payments, callbacks, weather, and slow weeks.

For a working remodeling owner, billable hours typically land somewhere in the range of 1,000 to 1,400 per year. That means 30 to 50 percent of your paid time is not directly on a client's job. If you divide your target income by 2,080, you will undercharge badly.

Overhead Is Not Optional, and It Is Not Your Salary

Overhead is everything the business spends to stay open that is not tied to a single job. It runs whether you are working or not. Keep it separate from your owner pay and separate from job materials.

• Vehicle payments, fuel, and maintenance
• Tools, equipment, and replacements
• Insurance, licensing, and bonding
• Phone, software, and marketing
• Office costs, accounting, and legal
• Non-billable labor like an office helper

Add these up for the year. For a lean solo or small-crew remodeler, annual overhead commonly falls in the range of $25,000 to $60,000. Bigger operations with trucks and staff go well past that. The point is to know your number, not to borrow someone else's.

A Worked Example You Can Copy the Method From

Let us build a rate from scratch. Numbers are illustrative, so plug in your own.

1. Target owner income: $90,000 per year.
2. Annual overhead: $40,000 per year.
3. Profit target on top of your pay: 10 percent of the two above, roughly $13,000. Profit is what funds growth and a cushion, and yes it is separate from your salary.
4. Total the business must recover: $90,000 + $40,000 + $13,000 = $143,000.
5. Billable hours for the year: 1,200.
6. Base rate: $143,000 divided by 1,200 = about $119 per hour.

So this remodeler needs roughly $119 per billable hour just to hit the plan. If they had assumed 2,080 hours instead of 1,200, they would have landed near $69 per hour and slowly gone broke while feeling busy. Same goals, wildly different result, all from the billable-hours assumption.

Why Copying a Competitor's Rate Loses Money

When you see another remodeler charging $85 an hour, you have no idea what is behind it. Maybe they have no truck payment. Maybe their spouse does the books for free. Maybe they are underpricing and quietly heading out of business. Maybe they run a bigger crew where the math works differently. Their number reflects their overhead, their billable hours, and their margins, none of which match yours.

Use market rates as a sanity check, not a starting point. If your calculated rate is far above local norms, look at your overhead and your billable percentage before you cut price. Often the fix is billing more of your hours and trimming waste, not charging less.

Turning the Rate Into Winning Quotes

Clients rarely want to hear a raw hourly number. On remodels, most pros quote by the job using the hourly rate as the engine underneath. You estimate the labor hours, apply your rate, add marked-up materials and subs, then present one clear price. The hourly math stays in your spreadsheet, and the customer sees a professional scope and total.

Two things protect that number after the handshake: a clean, detailed quote so there is no confusion on scope, and getting paid on time so your billable hours actually turn into cash. A rate on paper means nothing if invoices sit unpaid for 60 days.

Revisit Your Rate Every Year

Your rate is not set in stone. Overhead creeps up, fuel and material prices move, and your target income should grow. Recalculate at least once a year, and any time you add a truck, a hire, or a new insurance cost. A rate that was right two years ago is probably underwater today.

Do the math, know your floor, and stop pricing from your gut. The remodelers who last are not the cheapest. They are the ones who know exactly what every billable hour has to earn.