Quick Answer
Contractor labor rates are what you bill a client for an hour of work, not the wage you pay. In 2026, billed rates run from about $40 per hour for general labor to $150 per hour for licensed electrical, plumbing, and HVAC work. A billed rate has to cover the wage, the burden on top of it (25% to 40% for taxes and insurance), and your overhead and profit. These figures are estimates and national midpoints. Prices vary by region, so get local quotes before you set yours.
Last updated: 2026-06-10
2026 Labor Rates by Trade
The table shows typical 2026 numbers for a single worker-hour, materials not included. Wage is what you pay the worker. Billed rate is what a contractor charges the client after burden, overhead, and profit. Treat these as estimates: your market sets the real number, and licensed trades sit at the top for licensing and liability reasons.
| Trade | Wage Range | Typical Billed Rate | Billed Range |
|---|---|---|---|
| General laborer | $15 to $35/hr | $50/hr | $40 to $65/hr |
| Carpenter | $20 to $45/hr | $70/hr | $55 to $95/hr |
| Painter | $18 to $40/hr | $55/hr | $45 to $75/hr |
| Handyman | varies | $80/hr | $50 to $125/hr |
| Electrician (licensed) | licensed | $85/hr | $50 to $150/hr |
| Plumber (licensed) | licensed | $90/hr | $50 to $150/hr |
| HVAC tech (licensed) | licensed | $100/hr | $75 to $150/hr |
| General contractor (own hours) | owner | $90/hr | $50 to $150/hr |
Figures are 2026 estimates drawn from BLS wage data and contractor cost guides. They are starting points, not quotes. Labor rates vary by region by 30% to 50%, so get local quotes and compare multiple bids before you price a job.
A Worked Example: Wage to Billed Rate
Here is the math I run on a carpenter I pay $30 an hour. Add 35% burden for payroll taxes, workers' comp, and benefits, and the true cost is about $40.50 per hour. Now layer in 20% overhead and a 15% net profit target, and the hour bills at roughly $58 to $62. If I bid that hour at $45 because it feels close to the wage, I worked all day to lose money. That is the trap that keeps busy contractors broke.
| Step | Amount (per hour) |
|---|---|
| Gross wage paid | $30.00 |
| Plus 35% labor burden | $40.50 true cost |
| Plus overhead and profit | $58 to $62 billed |
| Margin lost if billed at wage | $28+/hr |
Want it done for you? Run your real numbers through the Burdened Labor Rate Calculator and the Contractor Hourly Rate Calculator, then check your markup with the Contractor Markup Calculator.
How Contractor Labor Rates Work
What goes into a billed labor rate, why it changes by trade and region, and how to set yours so every hour makes money.
What Is a Labor Rate (and What It Is Not)
A labor rate is what you charge a client for one hour of a worker's time, not what you pay that worker. Those are two different numbers, and confusing them is how contractors go broke while staying busy.
Your billed labor rate has to cover three things: the wage, the burden on top of that wage (taxes, insurance, benefits), and your overhead and profit. A carpenter you pay $30 an hour does not cost you $30 an hour. By the time you add payroll taxes, workers' comp, and the share of your truck, tools, and office that hour has to carry, the real cost is closer to $42 to $48. Bill at the wage and you lose money on every hour worked.
- Wage: the gross hourly pay the worker takes home before taxes
- Burden: 25% to 40% on top of the wage for FICA, workers' comp, unemployment, and benefits
- Overhead + profit: the markup that keeps the business alive and pays you
Key Takeaways
- Billed rate is not the wage you pay
- Burden adds 25% to 40% on top of wage
- Overhead and profit ride on top of burden
2026 Contractor Labor Rates by Trade
Billed labor rates in 2026 run from about $40 an hour for general labor to $150 an hour for licensed electrical, plumbing, and HVAC work. The spread comes from licensing, risk, and how hard the trade is to staff right now.
The numbers below are typical 2026 billed rates for a one-person hour of work, materials not included. They are national midpoints. Your market sets the real number, and the gap between a rural county and a major metro can be 40% or more on the same trade.
- General laborer: wage $15 to $35/hr, billed $40 to $65/hr
- Carpenter: wage $20 to $45/hr, billed $55 to $95/hr
- Painter: wage $18 to $40/hr, billed $45 to $75/hr
- Electrician: billed $50 to $150/hr, typical $85/hr
- Plumber: billed $50 to $150/hr, typical $90/hr
- HVAC tech: billed $75 to $150/hr, typical $100/hr
- Handyman: billed $50 to $125/hr, typical $80/hr
- General contractor (own hours): billed $50 to $150/hr, typical $90/hr
Licensed trades sit at the top for a reason. The license, the bond, the liability, and the years it takes to get there all get priced into the hour.
Key Takeaways
- General labor billed $40 to $65/hr
- Licensed trades billed up to $150/hr
- Rates are national midpoints, set locally
Why the Same Trade Costs More in One Town Than Another
Region is the single biggest swing on a labor rate, often 30% to 50% on identical work. A bathroom remodel that bills at $55 an hour in a rural market can bill at $85 in a coastal metro, same scope, same quality.
I have worked from Alaska to the Marshall Islands to the Pacific Northwest, and the rate followed the cost of living and the local labor supply every single time. Three things move the number.
- Cost of living: high-rent metros pay higher wages, so billed rates climb to match
- Labor supply: the skilled-trade shortage hits hardest in fast-growing areas, and scarce labor charges more
- Workers' comp class rates: roofing and framing comp can run 15% to 25% of payroll in some states, and that lands in the rate
This is why a national rate chart is a starting point, never a quote. Always get local quotes and compare multiple bids before you trust a number.
Key Takeaways
- Region swings rates 30% to 50%
- Labor shortage pushes rates up in growth markets
- Workers' comp class rate varies by trade and state
Turning a Wage Into a Billed Rate
The clean way to set a rate: take the wage, add burden to get your true cost, then mark it up for overhead and profit.
Say you pay a carpenter $30 an hour. Add 35% burden and your real cost is about $40.50 an hour. Now you need overhead and profit. If your overhead is 20% and you want a 15% net profit, you are billing that hour at roughly $58 to $62. Bill it at $45 because that feels close to the wage, and you just worked all day to lose money you will not see until tax time.
- Step 1: Start with the gross hourly wage
- Step 2: Multiply by 1.25 to 1.40 for burden to get true cost
- Step 3: Divide by your billable-hour efficiency (drive time and breaks are not billable)
- Step 4: Add overhead and profit markup to land the billed rate
Run your own numbers with the Burdened Labor Rate Calculator and the Contractor Hourly Rate Calculator.
Key Takeaways
- Wage x 1.25 to 1.40 = true cost
- Add overhead and profit to set billed rate
- Non-billable time has to be priced in
Common Mistakes That Wreck Your Labor Pricing
The most expensive mistake in the trades is billing labor at or near the wage you pay. It looks competitive on the bid and bleeds you dry on the job.
- Forgetting burden: taxes and comp are not optional, and they are 25% to 40% you have to recover
- Billing 8 hours when you pay 8 hours: drive time, material runs, and cleanup eat real hours that still cost you
- One flat rate for every trade: a $45 handyman rate on licensed electrical work means you are subsidizing the sub out of your own margin
- Chasing the lowball bid: winning on price alone usually means you missed scope or shorted your own labor line
Good, fast, or cheap. Pick two. If your labor rate is the cheapest in town, something in your pricing is broken.
Key Takeaways
- Never bill at the wage you pay
- Price non-billable hours into the rate
- Use trade-specific rates, not one flat number
How to Use This Calculator
Find your trade in the rate table
Start with the 2026 labor rate table below. Locate your trade and read across for the typical wage range and the billed hourly rate range a contractor charges a client.
Adjust for your region
Labor rates swing 30% to 50% by market. Nudge the national midpoint up for high cost-of-living metros and down for rural areas, then confirm against local quotes.
Add your burden and overhead
Take the wage you actually pay, add 25% to 40% burden for taxes and insurance, then add overhead and profit to land your real billed rate.
Build the full estimate
Drop your labor rate into a complete bid alongside materials, equipment, and markup so every hour on the job is priced to make money.
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Frequently Asked Questions
What is the average contractor labor rate in 2026?
In 2026, billed contractor labor rates run from about $40 per hour for general labor to $150 per hour for licensed electrical, plumbing, and HVAC work. A carpenter typically bills $55 to $95 per hour, and a general contractor bills around $90 per hour for their own time. These are national midpoints. Your local market, the trade, and the risk of the work set the real number, so get quotes from local contractors before you trust a figure.
What is the difference between a labor rate and a wage?
A wage is what you pay the worker. A labor rate is what you bill the client. They are not the same number. A carpenter you pay $30 per hour costs you closer to $40 to $48 per hour once you add burden (payroll taxes, workers' comp, benefits), and you still have to add overhead and profit on top of that. Bill at the wage and you lose money on every hour. Use the Burdened Labor Rate Calculator to see your true cost per hour.
How do contractors calculate their labor rate?
Start with the gross wage, multiply by 1.25 to 1.40 to add labor burden, then add overhead and profit markup. Example: a $30 wage at 35% burden is about $40.50 true cost. With 20% overhead and 15% profit, you bill that hour at roughly $58 to $62. You also have to account for non-billable time like drive time and material runs. The Contractor Hourly Rate Calculator walks through it step by step.
Why are electrician and plumber rates so much higher than carpenter rates?
Licensed trades carry more cost behind the hour. The license, the bond, higher liability insurance, continuing education, and years of apprenticeship all get priced into the rate. Electricians and plumbers commonly bill $50 to $150 per hour while a carpenter bills $55 to $95. The skilled-trade labor shortage pushes licensed rates higher still in fast-growing markets.
How much do labor rates vary by region?
Region is the biggest single swing on a labor rate, often 30% to 50% on identical work. A remodel that bills at $55 per hour in a rural county can bill at $85 in a coastal metro for the same scope and quality. Cost of living, local labor supply, and state workers' comp class rates all move the number. A national chart is a starting point, never a quote. Always compare multiple bids from local contractors.
How do I price labor for a job I am bidding?
Set a billed hourly rate per trade, estimate the labor hours each task will take, then multiply. For a tile job that takes 24 hours at a $65 billed rate, that is $1,560 in labor before materials. The hard part is the hour estimate, not the rate. Track your real production rates over time so your hour estimates get tighter. Then bundle labor, materials, and markup into one clean bid with the Construction Estimate Template.
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