Electrician hourly rate UK: how to work out yours

Somebody asks what you charge an hour and you hear yourself saying a number you picked up years ago, probably from the spark you worked alongside when you went out on your own. You have never really checked it. You just know it sounds about right, and you know it is about what everyone else round here says.

That is how most electricians in the UK arrive at an hourly rate, and it is why so many of them are busy and skint at the same time. Your rate is not a number you copy. It is a number that comes out of your own costs, your own working year and the wage you want to take home. Nobody else’s figures will give you yours.

I am not going to tell you what to charge. I do not know your van, your overheads or your area, and anyone who tells you a national figure over the internet is guessing. What I will do is show you how to work yours out, and why the first number you get back usually makes people sit up.

Why the hourly rate everyone quotes is not what they earn

There is a gap between the rate you say on the phone and the money that ends up in your account, and the gap is bigger than most sparks think.

Start with the working year. There are 52 weeks in it. Take off your holiday, the bank holidays you do not work, a week where you are ill or the van is off the road, and you are down to something like 45 working weeks before you have done anything. Call it a 45 hour week if you are honest about it, and that is your ceiling.

Now take off the hours nobody pays you for. Quoting. Driving between jobs. Standing in the wholesaler. Certificates and paperwork on a Sunday night. Chasing an invoice. Answering the phone to somebody who is never going to book you. For most one van electricians, the hours you can actually put on an invoice are nowhere near the hours you work, and that is the single thing that wrecks the sums.

So when a spark says he is on a certain rate and works all week, he is quietly dividing his wage by the hours he is paid for and ignoring everything else. The real number is lower. Sometimes a lot lower.

How to work out your electrician hourly rate

This is twenty minutes with a pen. Do it once a year and you will never guess again.

• 1. Add up what it costs to be in business for a year. Van, fuel, insurance, tools, test gear and calibration, scheme membership, accountant, phone, software, workwear, training, pension. Everything you pay whether or not you work a single day.
• 2. Decide the wage you want. Not what you survive on. What you want to take home after tax, written down as a real figure. If you will not say it out loud you will never charge it.
• 3. Work out your chargeable hours. Weeks you actually work, times the hours a week you can genuinely invoice. Be ruthless here. Most electricians who try this are shocked at how small the number is.
• 4. Add the two totals and divide by the chargeable hours. Costs plus the wage you want, divided by the hours you can invoice. That is the rate your business needs to stand up.
• 5. Add something for the bad weeks. The jobs that go wrong, the one that never pays, the fortnight nobody rings. If your rate has no margin in it, the first bad month comes out of your wage.

Do not round that number down because it makes you wince. It is arithmetic. It is telling you what an hour of your time has to earn for the business to work, and arguing with it does not change it.

If you would rather have the sums done for you, I built the free Minimum Charge Calculator that does exactly this. Put in your costs, your hours and the wage you want, and it gives you the rate your business needs.

Your hourly rate is not your price

Here is the bit people miss. Working out your rate does not mean you go out quoting by the hour.

Hourly pricing punishes you for being good. You are quicker than the bloke who trained last year, you know what is behind the plasterboard, and you get it done in half the time. Charge by the hour and you get paid less for being better at your job. The customer is not buying your hours anyway. He is buying a socket that works and a certificate he can show someone.

So use the rate as your floor, not your pitch:

• A minimum charge for small work. Nobody gets a visit for less than it costs you to turn up. A call out is not an hour, it is an hour plus the driving, the parking, the paperwork and the slot you gave away.
• Priced jobs, not estimated jobs. Work out the time and materials in your head using the rate, then give one figure for the job. The customer hears a price, you keep the efficiency.
• Price by circuits and scope, not by bedrooms or by hours. An EICR on a flat with four circuits is not the same job as one with fourteen, and the hour on the clock will never explain that to a customer.

What to say when someone asks your hourly rate on the phone

They are not really asking for a rate. They are asking whether you are going to be reasonable, and whether this is going to be a nasty surprise.

Do not fire a number down the phone. Ask what the job is, how old the place is and what is going on. Then tell them how you work: a minimum charge for small jobs, a fixed price for anything bigger, and no surprises at the end. That answers the real question, and it moves the conversation off price and onto the work.

If they only ever want the cheapest hourly rate in town, there is always somebody who will beat you to it, and I would rather you lost that one early than spent a Saturday quoting it.

Put the number in writing

Whatever you land on, write it down. A page in a notebook with your costs, your chargeable hours, your minimum charge and your rate. Stick it on the van wall if that helps. The reason sparks drift back to the old number is that the old number is the only one they can remember under pressure.

Review it every year, and any year your insurance, fuel, scheme fees or materials have gone up and your rate has not, you have quietly given yourself a pay cut. That is how a busy electrician ends up working more and earning less without ever making a decision about it.

This is the kind of thing we go through inside My Electricians ToolBox, with a few hundred other self employed electricians working the same numbers out. Not theory. The actual sums, the minimum charge, and the words to use when somebody pushes back on price.

One question before you go. If I asked you today what one hour of your time has to earn, could you tell me where that number came from?