Setting Hourly Rates in Service Trades: The Cost-Stack Math
By Andrew James Flores, Nathan Management · Updated September 23, 2026 · Editorial Standards
A photographer, a videographer, a bookkeeper, a virtual assistant and a tutor can start from the same income goal and still need very different prices, because each trade sells a different unit and hides a different block of unpaid time. This guide builds one cost-stack worksheet per trade, shows the mechanic that most often breaks that trade’s pricing, and ends with the exact calculator entries for each trade’s base worksheet.
The worksheet: one formula, two units
Two units keep the math honest. A production hour is any hour spent delivering the work: the session or meeting itself plus the prep, editing, travel and notes that belong to it. A sold unit is what the client actually buys: one contact hour, one finished video, one month of books, one task package.
annual budget = income goal + business operating costs + benefits budget
annual production hours = sold units per year × production hours per unit
production-hour floor = annual budget ÷ annual production hours
unit price = production-hour floor × production hours per unit ÷ collection rate ÷ (1 − fee rate)
Two consequences follow. For a trade that sells packages, the package price at full collection and no fees is simply the annual budget divided by packages sold; the production hours decide whether that workload fits your week and what to charge for anything outside the package. And general administration and sales time comes out of your capacity once, when you decide how many hours you can deliver, so it should never be subtracted again inside each unit. Percentage fees belong in the fee rate, never also in operating costs.
Floors and prices are computed from unrounded values and rounded up to the next cent, the same rule the calculator uses for a quote. What an existing price earns per hour is rounded to the nearest cent.
| Trade | Annual budget | Sold units per year | Production hours per unit | Production hours per year | Production-hour floor | Price per sold unit |
|---|---|---|---|---|---|---|
| Photographer | $81,000 | 50 packages | 24 | 1,200 | $67.50 | $1,620.00 |
| Videographer | $80,000 | 40 videos | 40 | 1,600 | $50.00 | $2,000.00 |
| Bookkeeper | $59,000 | 230 client-months | 5 | 1,150 | $51.31 | $256.53 |
| Virtual assistant | $47,000 | 400 packages | 3 | 1,200 | $39.17 | $117.50 |
| Tutor | $31,500 | 540 contact hours | 1.5 | 810 | $38.89 | $58.34 |
Photographers: a gear reserve and the whole delivery cycle
In this illustration, the photographer wants $75,000 before personal taxes and spends $6,000 a year running the business. Each of 50 packages takes 24 production hours: 8 hours of shooting and 16 of culling, editing and delivery, with travel billed separately. That is 1,200 production hours (25 a week over 48 working weeks), a floor of $81,000 ÷ 1,200 = $67.50, and a package price of $67.50 × 24 = $1,620.00. Add travel, second shooters, albums and prints to each quote as project costs rather than folding them into the annual budget as well.
Budget camera replacement as a reserve
The $6,000 operating budget contains a gear replacement reserve: a $9,600 kit replaced every three years with no resale value sets aside $3,200 a year. Spread over the 400 shooting hours in 50 packages, that is $8.00 per shooting hour, or $64.00 per package. The other $2,800 covers insurance, software and storage. The replacement cycle is the assumption that moves the package price most:
| Replacement cycle | Annual reserve | Reserve per shooting hour | Annual operating costs | Production-hour floor | Package price |
|---|---|---|---|---|---|
| 2 years | $4,800.00 | $12.00 | $7,600.00 | $68.84 | $1,652.00 |
| 3 years | $3,200.00 | $8.00 | $6,000.00 | $67.50 | $1,620.00 |
| 4 years | $2,400.00 | $6.00 | $5,200.00 | $66.84 | $1,604.00 |
A replacement reserve is a cash-planning number: money you set aside so the kit can be replaced when it wears out. Depreciation is the tax treatment of the same equipment, and it follows the rules in IRS Publication 946 (2025), How To Depreciate Property. The two can differ for the same camera in the same year, so price from the reserve and let your tax return follow Publication 946.
Count editing hours in every session price
A one-hour portrait session is rarely one hour of work. In this example each hour on camera needs 1.5 to 2.5 hours of editing and delivery (the package above uses 2.0), so a $150 session earns far less per hour worked than its headline rate, and pricing the session at the $67.50 floor gives a very different number:
| Editing hours per session hour | Total production hours | What a $150 session earns per production hour | Session price at the floor |
|---|---|---|---|
| 1.5 | 2.5 | $60.00 | $168.75 |
| 2.0 | 3.0 | $50.00 | $202.50 |
| 2.5 | 3.5 | $42.86 | $236.25 |
Across that range the session price moves by $67.50, a full floor hour. A common starting point is to time your next three edits and use the average rather than a remembered figure.
Videographers: price revision rounds as production hours
The example videographer wants $70,000 and budgets $10,000 a year for operating costs, including camera, audio and lighting replacement and editing software. Each of 40 videos takes 40 production hours: 8 on site and 32 in editing, sound, color and revisions. That is 1,600 production hours (32 a week over 50 working weeks), a floor of $80,000 ÷ 1,600 = $50.00 and a price of $2,000.00 per video.
Quoting per finished minute hides the variable that actually drives a videographer’s time: post-production and revision hours. In this example the 32 post-production hours include two revision rounds of 3 hours each. Every further round the client asks for without a change order comes straight out of your hourly pay:
| Extra revision rounds | Production hours | What $2,000 earns per production hour | Price that keeps the $50.00 floor |
|---|---|---|---|
| 0 | 40 | $50.00 | $2,000.00 |
| 1 | 43 | $46.51 | $2,150.00 |
| 2 | 46 | $43.48 | $2,300.00 |
| 3 | 49 | $40.82 | $2,450.00 |
A common starting point is to write the number of included revision rounds into the quote and to price each extra round at the floor times its hours: here 3 × $50.00 = $150.00 per extra round. Define a round as one consolidated list of changes, so a stream of single notes cannot turn into ten rounds.
Bookkeepers: price monthly packages by hours, and cleanup separately
The example bookkeeper wants $55,000 and spends $4,000 a year on software, training and insurance. The practice sells 230 client-months a year, about 19 monthly clients, at 5 production hours each: 1,150 production hours (25 a week over 46 working weeks), a floor of $59,000 ÷ 1,150 = $51.31 and a monthly package price of $256.53.
What varies between clients is the monthly hours: transaction volume, the number of accounts to reconcile and how organized the source documents arrive. Tier the package by hours instead of giving every client the same price:
| Production hours per client-month | Monthly package price | Weekly production hours if all 230 client-months are at this tier |
|---|---|---|
| 4 | $205.22 | 20 |
| 5 | $256.53 | 25 |
| 6 | $307.83 | 30 |
| 8 | $410.44 | 40 |
If every client needed 8 hours, the same book of 230 client-months would take 40 production hours a week before any administration. That is the signal to raise the tier price or take on fewer clients.
A new client who is three months behind needs cleanup before the monthly package can start. Price it as a separate project. Assume 8 hours for each messy month against 5 for a routine one, so the cleanup is 24 hours; with the calculator’s suggested 20% extra-time allowance for familiar work with a new client, the planned time is 28.8 hours and the cleanup quote is $1,477.57. Invoice it before the first monthly package so the routine price is never quietly absorbing catch-up work.
Virtual assistants: turn task packages into a retainer
The example virtual assistant wants $45,000 and spends $2,000 a year on software and equipment. Selling 400 task packages a year at 3 production hours each fills 1,200 production hours (25 a week over 48 working weeks): a floor of $47,000 ÷ 1,200 = $39.17 and a package price of $117.50. Write down exactly what one package includes, such as a set number of inbox sessions or scheduled posts, so the three hours stay three hours.
Selling 400 separate packages a year means finding, scheduling and invoicing a great many small jobs. Converting steady clients to a monthly retainer at the same floor keeps the price consistent and cuts that sales work. At 1,200 production hours a year, capacity is 100 hours a month:
| Retainer hours per month | Monthly retainer price | Clients that fill 100 hours a month |
|---|---|---|
| 10 | $391.67 | 10 |
| 20 | $783.34 | 5 |
| 40 | $1,566.67 | 2.5 |
Decide what happens to unused hours before you sell a retainer. If unused hours roll over, you owe that time later and it is capacity you have already sold; if they expire at month end, the retainer is paying for reserved availability. A common starting point is to let unused hours expire and to cap each retainer at the hours you can genuinely reserve that month. The hourly, project and retainer guide compares the three models in more detail.
Tutors: contact hours are not production hours
The example tutor wants $30,000 and spends $1,500 a year on materials and software, a $31,500 annual budget. Twelve sold contact hours a week for 45 weeks is 540 contact hours a year. Each contact hour needs half an hour of prep and notes, so production time is 540 × 1.5 = 810 hours. The production-hour floor is $31,500 ÷ 810 = $38.89, and the contact-hour price is $31,500 ÷ 540 = $58.34.
When your weekly capacity is the fixed quantity, prep time decides how many contact hours you can sell. With 18 production hours a week as the real limit, heavier prep leaves fewer hours to sell, and the contact-hour price has to rise to cover the same budget:
| Prep hours per contact hour | Contact hours per week | Contact hours per year | Contact-hour price |
|---|---|---|---|
| 0.25 | 14.4 | 648 | $48.62 |
| 0.5 | 12 | 540 | $58.34 |
| 1.0 | 9 | 405 | $77.78 |
Hold contact hours at 12 a week instead and the $58.34 price stays put; heavier prep then lowers what you earn per hour worked, from $46.67 with a quarter hour of prep to $38.89 with half an hour and $29.17 with a full hour, while the week grows from 15 to 18 to 24 production hours.
Platform fees and group sessions
If a tutoring platform keeps 25% of each payment, divide by the share you keep: $31,500 ÷ 540 ÷ 0.75 = $77.78 per contact hour. At $77.78, 540 contact hours less the 25% fee returns $31,500.90, which covers the $31,500 budget. Multiplying by 1.25 instead gives $72.92 and, computed from unrounded values, falls $1,968.75 short of the budget over a year.
Group sessions change the unit again. At $35 a seat, one group hour brings in $35 with one student, $70 with two and $105 with three, before fees. Two seats clear the $58.34 contact-hour price, provided a group hour needs no more prep and enrollment work than a private one; if it needs more, add those hours to the unit before you set the seat price.
Transfer each worksheet into the calculator
The calculator returns an hourly floor. For these trades, enter production hours in “Billable hours per working week”, because every production hour is paid for by a unit price. Then price one unit with the project check: put the production hours per unit in “Estimated project hours” and set “Extra-time allowance (%)” and “Project-only direct costs ($)” to 0. To match these examples, leave “Personal benefits budget ($/year)” at 0, “Invoices eventually collected (%)” at 100 and “Fees on collected payments (%)” at 0.
| Trade | Personal income goal, before taxes ($/year) | Business operating costs ($/year) | Billable hours per working week | Weeks with no billing each year | Hourly floor shown | Estimated project hours | Project quote shown |
|---|---|---|---|---|---|---|---|
| Photographer | 75,000 | 6,000 | 25 | 4 | $67.50 | 24 | $1,620.00 |
| Videographer | 70,000 | 10,000 | 32 | 2 | $50.00 | 40 | $2,000.00 |
| Bookkeeper | 55,000 | 4,000 | 25 | 6 | $51.31 | 5 | $256.53 |
| Virtual assistant | 45,000 | 2,000 | 25 | 4 | $39.17 | 3 | $117.50 |
| Tutor | 30,000 | 1,500 | 18 | 7 | $38.89 | 1.5 | $58.34 |
For the tutor’s 25% platform fee, enter 25 in “Fees on collected payments (%)” instead of dividing by hand: the hourly floor becomes $51.86 and the 1.5-hour project quote becomes $77.78. The fee is then built in, so skip the division by 0.75. You can also work straight per contact hour by entering 12 billable hours a week with 7 weeks off; the floor shown, $58.34, is then already the contact-hour price, and you confirm separately that 18 production hours a week fit your schedule after administration.
Plan for self-employment tax and income tax with the self-employment tax guide, and build the operating-cost line item by item with the true business costs guide.
Where each worksheet sits next to employee wage data
A cost stack tells you the least you can charge; what clients in your market pay is a separate question. The closest public reference point is employee pay. The U.S. Bureau of Labor Statistics Occupational Employment and Wage Statistics (OEWS) program reports wages by occupation, and the figures below are its May 2025 national median hourly wages for people employed in those occupations.
| Trade in this guide | Closest OEWS occupation | National median hourly wage | Median × 2,080 paid hours | Worksheet production-hour floor | Floor if the income goal equals median × 2,080 |
|---|---|---|---|---|---|
| Photographer | Photographers (27-4021) | $21.47 | $44,657.60 | $67.50 | $42.22 |
| Videographer | Film and Video Editors (27-4032) | $36.26 | $75,420.80 | $50.00 | $53.39 |
| Bookkeeper | Bookkeeping, Accounting, and Auditing Clerks (43-3031) | $24.36 | $50,668.80 | $51.31 | $47.54 |
Read the last column as the freelance price of matching an employee’s wage with the same operating costs and hours as the worksheet. An employee is paid for every paid hour while the employer supplies the equipment and pays its share of payroll taxes; your floor has to carry the operating costs and the unsold hours instead. Matching the median photographer wage takes a $42.22 floor, or a $1,013.16 package. Matching the median film and video editor wage takes $53.39, which shows that the example videographer’s $70,000 goal sits below $75,420.80, the median editor wage over 2,080 paid hours. Benefits an employee would receive go in “Personal benefits budget ($/year)” on top.
OEWS reports wages by occupation rather than by business model, so as a virtual assistant or tutor, look up the occupation whose duties match your package on the OEWS site; the OEWS frequently asked questions page covers what the estimates include. To compare against prices other freelancers actually charge, collect quotes for comparable scopes with the benchmarking method.
Method and sources
Each trade’s base floor comes from the worksheet formula above; enter the Table 8 values in the calculator to see it, and see the calculator method for the full formula. The $150 session and $35-a-seat prices are example inputs, not formula results. Wage figures and the depreciation reference come from these primary sources:
- U.S. Bureau of Labor Statistics, Occupational Employment and Wage Statistics, May 2025, national median hourly wage: bls.gov/oes
- U.S. Bureau of Labor Statistics, OEWS frequently asked questions: bls.gov/oes/oes_ques.htm
- BLS public API series for the Table 9 wages (OEUN0000000000000 followed by the six-digit SOC code and 08): OEUN000000000000027402108, OEUN000000000000027403208 and OEUN000000000000043303108
- Internal Revenue Service, Publication 946 (2025), How To Depreciate Property: irs.gov/publications/p946
For floors across a wider range of income goals and weekly hours, see the rate floor tables.
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