Trade business overhead calculator (set your minimum rate)
Work out your true overhead per hour and set a minimum hourly rate that actually covers the cost of running your trade business.
Trade business overhead calculator (set your minimum rate)
Your minimum rate is not your wage. It is your wage plus the cost of running the business. If you do not know your overhead per hour, you cannot price jobs confidently.
Step 1: List monthly overheads
Use real numbers from the last 3 months and take an average.
Common overhead categories:
- Vehicle finance, fuel, insurance, servicing
- Tools, calibration, PPE, uniforms
- Phone, internet, software subscriptions
- Accountant, bank fees, card fees
- Marketing (ads, directories, lead services)
- Rent, storage, utilities
- Insurance (public liability, tools, professional)
- Training and certifications
Step 2: Calculate overhead per billable hour
Overhead per hour = Monthly overhead / Monthly billable hours
Example:
- Monthly overhead: GBP 5,400
- Monthly billable hours: 270
5,400 / 270 = GBP 20 per hour
Step 3: Build your minimum hourly rate
Minimum rate = Direct labour cost per hour + Overhead per hour + Profit per hour
If your labour cost is GBP 28/hour and you want GBP 10/hour profit:
28 + 20 + 10 = GBP 58/hour minimum
Overhead calculator worksheet
| Overhead item | Monthly cost |
|---|---|
| Van finance + fuel | 1,200 |
| Insurance (all) | 400 |
| Software + phone | 180 |
| Accountant + bank fees | 220 |
| Marketing | 800 |
| Tools + PPE | 200 |
| Rent/storage | 300 |
| Training/certs | 100 |
| Total overhead | 3,400 |
If you bill 170 hours/month:
3,400 / 170 = GBP 20 per hour overhead
Common mistakes to avoid
- Ignoring non-billable time. Quotes, callbacks, and admin are part of the cost.
- Using last year only. Costs rise fast; update quarterly.
- Forgetting finance fees. Card fees and finance charges can wipe out small margins.
Make it actionable in Toolfy
- Track billable hours on jobs so you know real capacity.
- Tag overhead-heavy jobs (long travel, complex compliance) and price accordingly.
- Use monthly reviews to update your minimum rate before busy season.
Once you know your minimum rate, pricing becomes simple: never price below it.
⚠️ Important Disclaimer
This guide is for general informational and educational purposes only. It does not constitute professional advice of any kind (legal, financial, tax, insurance, or otherwise).
Before making business decisions: Consult with qualified professionals (solicitors, accountants, insurance brokers, etc.) who can assess your specific circumstances. Laws, regulations, and industry standards change frequently and vary by location and situation.
Toolfy and the article authors accept no liability for decisions made or actions taken based on information provided in this guide. You are solely responsible for ensuring compliance with all applicable laws and regulations.
Frequently Asked Questions
What counts as overhead for a trade business?
How do I turn overhead into an hourly figure?
Need this workflow in Toolfy?
Spin up the exact checklist, scripts, and automations from this article inside your workspace.
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