An electrical contractor should charge the hourly rate that covers the full cost of each electrician, the vehicle and the overhead, divided by the hours you can actually bill, plus your profit margin. For most shops that number lands well above any wage multiple, because a large share of paid hours never reach an invoice.
Online answers usually quote a range of what electricians charge in some market. That tells you what a customer might pay. It doesn't tell you whether that rate covers your costs. Build your own.
Start with the cost of an electrician, not the wage
The wage is the starting input, not the answer. For context, the BLS puts the national median wage for electricians at $30.38 an hour and the mean at $34.37 (BLS OEWS, May 2025 estimates, checked October 2026). Pay varies a lot by state, metro and license level, so use your own payroll.
On top of wages sit payroll taxes, workers' compensation, benefits, paid time off and training. Your accountant can give you your burden rate. Then add the vehicle, tools, insurance, licensing, software, office staff, rent and your own pay as owner. That is the full cost the billable hours have to carry.
The billable hours problem
You pay an electrician for every hour of the week. You bill only the hours on a customer's job. The rest goes to driving, supply house runs, estimates, permit pickups, inspections that run late, callbacks and admin. The share that reaches an invoice is your billable hours share, and it is the most important number in the rate.
If an electrician is paid for 2,000 hours a year and bills 1,300, every billed hour carries the cost of about 1.54 paid hours.
The formula
With total annual cost per billing electrician C (wages, burden, vehicle and a share of overhead and owner pay), billable hours per year H, and target net margin m as a decimal:
Break-even rate = C ÷ H Billing rate = (C ÷ H) ÷ (1 − m)
Dividing by 1 − m is what makes m a margin on the price. Multiplying by 1 + m gives a smaller markup and a lower margin than you meant.
In this example the wage-multiple rate loses money on every hour. The break-even labor rate calculator runs the same math with your numbers.
What changes the rate
Billable share. This moves the rate more than any cost line. Raising billable hours from 1,300 to 1,450 in the example drops break-even from $115 to about $103. Fewer supply runs, tighter routes and fewer return trips all count.
Overhead per electrician. A shop with one office person and two electricians spreads that cost thinly. Adding electricians without adding office staff lowers overhead per billable hour.
Job type. Service work has more drive and setup per billed hour than a long install, so many contractors charge a higher service rate than their project rate. Price each from its own billable share.
Owner pay. If you leave your own salary out of C, the rate looks fine while you work for free. Put in a market wage for your role.
Hourly, flat rate or both
Many electrical shops bill time and materials for troubleshooting and flat prices for common tasks like panel swaps, circuits and fixture installs. Either way, the flat price should be built from the same billing rate: median task time × rate + parts + trip. The labor rate entry covers the definitions, and the field service pricing guide covers the full method.
Drive time is the quiet rate killer
Every hour on the road is paid and not billed, so it pushes H down and the rate up. A service electrician with customers scattered across a metro can lose a large slice of the day to driving. Grouping calls by area, and offering customers only times that fit near other work, keeps more of the day billable. That is what CrewLink's booking does: it offers only start times a qualified tech can reach from the previous job. The scheduling side of the trade is on the electrical page.
What to take away
- Billing rate = (total cost per billing electrician ÷ billable hours) ÷ (1 − target margin).
- Use full cost: wages, burden, vehicle, overhead and owner pay, not wages alone.
- Billable share is the biggest lever. Measure it from time on site, not the schedule.
- A wage multiple can sit below break-even without anyone noticing.
Common questions
Is three times the wage a good rule for electricians?
It's a rough shortcut and often too low, because it ignores how many paid hours you can't bill. Build the rate from full cost and billable hours, then compare it to the multiple.
Should electrical service work cost more per hour than project work?
Often, yes. Service calls carry more drive, setup and diagnosis per billed hour than a multi-day install. Calculate each rate from its own billable share.
How many billable hours does an electrician have per year?
It depends on your mix of work, territory and how the day is scheduled. Measure it from time on site at billable jobs over a few weeks, divided by paid hours.
Should I include my own salary in the rate?
Yes. Put in what you would pay someone else to do your job. Otherwise the business looks profitable while it underpays you.