PRICING GUIDE

Hourly Rate Calculator for Electricians: Set a Rate That Actually Works

Most self-employed electricians undercharge because they do not calculate their rate properly. This guide gives you the exact formula — covering overheads, billable hours, tax, and profit margin — so you can set a rate that covers every cost and delivers the income you deserve.

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12 min readUpdated 2026-06-10Andrew Moore, Founder of Elec-Mate

Written and reviewed by Andrew Moore, founder of Elec-Mate, against BS 7671:2018+A4:2026, IET Guidance Note 3 and the IET On-Site Guide.

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Key Takeaways

  • 1Your hourly rate must cover all overheads (van, insurance, tools, fuel, training, phone, software), not just your desired take-home pay — otherwise you are losing money on every job.
  • 2Billable hours are not 40 per week. After travel, quoting, admin, training, and quiet periods, most electricians achieve 1,200 to 1,500 billable hours per year — plan your rate around this reality.
  • 3The formula: (Target Income + Total Overheads + Tax Provision) / Annual Billable Hours = Minimum Hourly Rate. Most UK electricians need to charge £40 to £55+ per hour to run a profitable business.
  • 4Fixed-price quoting is usually more profitable than hourly rates — you benefit from efficiency, and customers prefer knowing the total cost upfront.
  • 5Elec-Mate AI cost engineer calculates job costs with accurate labour, materials, and overhead data — generating profitable quotes in minutes rather than hours.
01 · Pricing Guide

Why You Must Calculate Your Hourly Rate Properly

Most self-employed electricians pick a number — £35, £40, £45 per hour — based on what other electricians seem to charge, or what feels "about right." This is guesswork, and guesswork costs money.

If your rate does not cover your overheads, you are subsidising every customer from your own pocket. If it does not include a profit margin, you are working for wages — with none of the benefits of employment (holiday pay, sick pay, pension, employer NI contributions). And if it does not account for non-billable time, you are overestimating how much you actually earn per hour.

The difference between a correctly calculated rate and a guessed one can be £10 to £15 per hour. Over 1,300 billable hours per year, that is £13,000 to £19,500 in lost income. Not lost to tax, not lost to expenses — lost to poor pricing. That money should be in your pocket.

This guide walks you through the exact calculation. By the end, you will know your minimum viable hourly rate — the rate below which you lose money — and your target rate that delivers the income you deserve.

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02 · Pricing Guide

The Formula: Simple Maths, Powerful Results

The hourly rate formula has three inputs and one output:

Hourly Rate = (A + B + C) / D

  • A = Target annual take-home income — what you want in your pocket after tax. For example, £40,000.
  • B = Total annual overheads — every cost of running your business. For example, £14,000.
  • C = Tax and National Insurance provision — the tax you will owe on your profit (A + profit margin). For example, £11,000.
  • D = Annual billable hours — the hours you actually charge customers for. For example, 1,300 hours.

(£40,000 + £14,000 + £11,000) / 1,300 = £50 per hour

That is your minimum rate. Below this, you are losing money. At this rate, you are breaking even on your target income. Add a profit margin on top (typically 10% to 20%) and you have your target rate — in this example, £55 to £60 per hour.

Let us break down each input in detail so you can calculate your own number accurately.

03 · Pricing Guide

Listing Your Overheads: Every Cost Matters

Your overheads are every recurring cost of running your business — whether or not you are working on a job that day. Here is a comprehensive list for a typical self-employed electrician:

  • Van finance/depreciation: £200 to £500/month (£2,400 to £6,000/year)
  • Van insurance (business use): £50 to £125/month (£600 to £1,500/year)
  • Fuel: £200 to £400/month (£2,400 to £4,800/year)
  • Public liability insurance: £15 to £35/month (£150 to £400/year)
  • Professional indemnity insurance: £7 to £17/month (£80 to £200/year)
  • Tools insurance: £8 to £25/month (£100 to £300/year)
  • Competent person scheme (NICEIC/NAPIT): £25 to £50/month (£300 to £600/year)
  • Accountant: £25 to £50/month (£300 to £600/year)
  • Phone and data: £30 to £60/month (£360 to £720/year)
  • Software (Elec-Mate, accounting): £20 to £50/month (£240 to £600/year)
  • Training and CPD: £30 to £80/month averaged (£360 to £960/year)
  • Workwear and PPE: £10 to £20/month (£120 to £240/year)
  • Test equipment calibration: £5 to £15/month averaged (£60 to £180/year)
  • Marketing (Checkatrade, website, etc.): £20 to £100/month (£240 to £1,200/year)

Total typical overheads: £7,710 to £18,300 per year

Use your actual numbers, not averages. If you know your van costs £350 per month and your fuel is £280 per month, use those figures. The more accurate your overhead calculation, the more accurate your hourly rate — and the more confident you can be that every job is profitable.

Elec-Mate's expenses tracker captures every cost automatically. After a few months, you will have exact data on your overheads — no guesswork needed.

04 · Pricing Guide

Billable Hours: The Hidden Factor Most Electricians Ignore

This is where most hourly rate calculations go wrong. Electricians assume they will work 40 hours per week and charge for all of them. In reality, a significant portion of your working week is non-billable.

  • Travel between jobs: 5 to 8 hours per week. You cannot charge the customer for your drive from the last job. If you do 3 domestic jobs per day, that is 1 to 2 hours of driving between them.
  • Quoting and site surveys: 3 to 5 hours per week. Not every quote converts. If you quote 5 jobs per week and convert 3, that is 2 wasted hours plus travel time. Using Elec-Mate's AI cost engineer can reduce quoting time significantly.
  • Admin, invoicing, bookkeeping: 2 to 3 hours per week. Sending invoices, chasing payments, filing receipts, updating records. Elec-Mate handles most of this from your phone.
  • Materials collection: 2 to 3 hours per week. Trips to the wholesaler, waiting for deliveries, checking stock.
  • Quiet periods: Even busy electricians have quiet days and weeks. Seasonality, customer cancellations, weather delays, and gaps between jobs all reduce billable time.

Out of a 45-hour working week, most electricians achieve 26 to 32 billable hours. Over 47 working weeks (allowing for 4 weeks holiday and 1 week sick/bank holidays), that is 1,222 to 1,504 billable hours per year. Use 1,300 as a realistic planning figure for your first calculation, and adjust based on your actual experience after 6 to 12 months.

The fewer billable hours you achieve, the higher your hourly rate needs to be. If you only manage 1,100 billable hours, the example calculation changes from £50/hour to £59/hour. Every hour reclaimed from admin is worth your hourly rate in additional earnings.

05 · Pricing Guide

Profit Margin: Why Break-Even Is Not Enough

The formula gives you your break-even rate — the rate at which you earn your target income and cover your overheads, with nothing left over. That is not enough. You need a profit margin on top.

  • Business growth: Profit funds better tools, a newer van, additional training, marketing, or hiring an apprentice. Without profit, your business stands still.
  • Emergency fund: A broken-down van, a stolen tool kit, a quiet month, or an unexpected tax bill. Profit builds the buffer that keeps you trading through rough patches.
  • Fair compensation: You carry the risk of self-employment — no sick pay, no holiday pay, no employer pension contributions. Profit compensates for that risk. If you are not earning more than you would as an employee, why take the risk?

A healthy profit margin for a self-employed electrician is 10% to 20% on top of costs. On a break-even rate of £50 per hour, that means charging £55 to £60 per hour. This does not make you expensive — it makes you sustainable. The electrician charging £35 per hour and barely surviving is the one with the pricing problem, not you.

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06 · Pricing Guide

Hourly Rate vs Day Rate vs Fixed Price

Your calculated hourly rate is the foundation — but how you present your pricing to customers matters. Different situations call for different pricing methods.

Hourly Rate

Best for: fault-finding, investigation work, and small jobs where the scope is genuinely uncertain. Quote an hourly rate with an estimated time range. Risk: if the job takes longer, the customer pays more — which can cause friction. Reward: you are paid for every hour worked.

Day Rate

Best for: subcontract work and longer projects. A day rate of £280 to £350 (based on your hourly rate times 7 to 8 hours) is straightforward. Common for CIS work. Risk: if you work 10 hours, your effective hourly rate drops. Reward: simple and predictable.

Fixed Price

Best for: defined jobs (consumer unit upgrade, rewire, EV charger installation). Quote a total price including labour and materials. Risk: if the job takes longer than estimated, your profit shrinks. Reward: if you are efficient, your effective hourly rate increases. Customers love fixed prices. On consumer unit upgrades, always include a steel (non-combustible) enclosure (Reg 421.1.201) and price AFDDs where recommended (Reg 421.1.7) — omitting these from your quote creates both a compliance gap and a margin shortfall.

Most successful self-employed electricians use a mix: fixed prices for standard domestic jobs, day rates for subcontract and commercial work, and hourly rates for diagnostic and fault-finding work. The key is that every pricing method starts from your calculated hourly rate — you just present it differently.

Generate accurate fixed-price quotes in minutes

Elec-Mate's AI cost engineer uses real trade pricing data to calculate labour, materials, and overheads for any job.

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07 · Pricing Guide

When to Raise Your Rate

Your hourly rate is not set in stone. Review it at least once a year — and raise it when the numbers tell you to.

  • You are fully booked 3 to 4 weeks in advance. If demand exceeds your capacity, your rate is too low. Raise it until you are comfortably busy but not turning away so much work that you cannot cover quiet periods.
  • Your overheads have increased. Fuel, insurance, materials, and van costs all rise over time. If your overheads have gone up by 10% but your rate has not, your profit has dropped by more than 10% (because overheads are a larger proportion of the total).
  • You have gained qualifications or specialist skills. Completing the 2391, gaining AM2, or specialising in EV charging, solar PV, fire alarm systems, or AFDD-compliant domestic upgrades (Reg 421.1.7, BS 7671:2018+A4:2026) adds value. Specialist skills command premium rates.
  • Your take-home pay does not reflect your hours. If you are working 50 hours per week but earning less than you would as an employee, something is wrong. Run the calculation again and adjust.

Elec-Mate's business analytics show you your actual profit margin, average job value, and effective hourly rate across all jobs. Use this data to make pricing decisions based on facts, not feelings.

08 · Pricing Guide

Using Elec-Mate to Price Jobs Accurately

Calculating your hourly rate is the foundation. But on each individual job, you also need to estimate the labour time, materials cost, and overhead allocation accurately. This is where most electricians underquote — and where Elec-Mate transforms your pricing.

AI Cost Engineer

Describe the job — "consumer unit upgrade, 10 circuits, SPD, throughout earthing upgrade" — and the AI calculates the labour time, materials list with current trade prices, and overhead allocation. It produces a profitable quote in minutes that you can send to the customer immediately.

Job Profitability Analysis

After each job, see the actual profit versus the quoted price. Track your effective hourly rate by job type. Identify which types of work are most profitable and which are costing you money. Use this data to refine your pricing.

Cash Flow Planner

See your income, expenses, and projected profit in real time. Forecast your tax liability. Plan for quiet periods. Know exactly where you stand financially — not at the end of the year, but today.

Stop guessing — start pricing for profit

Elec-Mate's AI cost engineer, job profitability tracker, and cash flow planner give you the financial clarity to price every job for profit.

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