How to Calculate Your True Hourly Rate (You'll Be Surprised)

You worked 12 hours on Saturday and made £800. That's £66 an hour, right? Wrong. After food costs, fuel, staff, and the hours you spent quoting and planning, you're probably making closer to £15 an hour. Here's how to calculate your true hourly rate—and why it matters.

Why Your "Hourly Rate" Is a Lie

Most mobile vendors calculate their earnings the same way: take the cash from an event, divide by the hours worked, and feel pretty good about it. But this simple calculation ignores two crucial factors that slash your real earnings:

1. Hidden costs – The money that leaves your pocket before you see profit
2. Invisible hours – The unpaid time that makes your paid hours possible

Understanding your true hourly rate isn't just an accounting exercise. It's the foundation of every pricing decision you make. Get it wrong, and you're essentially paying customers for the privilege of serving them.

The True Hourly Rate Formula

Here's the formula that tells the real story:

Let's break down each component.

Step 1: Calculate Your True Costs

For every booking, you need to account for:

Direct Costs

• Food/product costs – Ingredients, stock, supplies
• Fuel – Getting to and from the venue
• Staff wages – Including employer's NI contributions
• Consumables – Napkins, packaging, disposables
• Pitch fees – If applicable

Proportional Overheads

These ongoing costs should be divided across your bookings:

• Vehicle costs – Insurance, MOT, servicing, depreciation
• Equipment maintenance – Repairs, replacements, upgrades
• Licences and permits – Food hygiene, trading licences, gas safety
• Insurance – Public liability, employers liability, product liability
• Marketing – Website, social media ads, print materials
• Software subscriptions – Booking systems, accounting software

Step 2: Count Your Invisible Hours

This is where most vendors dramatically undercount. Your total hours must include:

• Quoting and correspondence – Emails, calls, contracts
• Menu planning – Customising offerings for each event
• Shopping and prep – Sourcing ingredients, prepping food
• Travel time – Both ways, including loading and unloading
• Setup and breakdown – Before and after service
• Cleaning – Vehicle, equipment, deep cleans
• Admin – Invoicing, bookkeeping, scheduling
• Marketing – Social media, responding to enquiries

Worked Example: The Wedding Caterer

Let's look at Sarah, a mobile pizza caterer who thinks she's doing well:

The Booking

Wedding reception, 100 guests, £1,200 fee

Visible Calculation

6 hours serving = £200/hour. Brilliant!

True Calculation

Costs:

• Ingredients: £280
• Fuel (60-mile round trip): £45
• Assistant wages: £90
• Consumables: £35
• Proportional overheads: £85
• Total costs: £535

Hours:

• Quoting and planning: 2 hours
• Shopping: 1.5 hours
• Prep: 3 hours
• Travel: 2 hours
• Setup: 1.5 hours
• Service: 6 hours
• Breakdown: 1 hour
• Cleaning: 1.5 hours
• Invoicing/admin: 0.5 hours
• Total hours: 19 hours

True Hourly Rate:

(£1,200 − £535) ÷ 19 = £35 per hour

Still respectable—but a far cry from the £200/hour Sarah imagined. And this example assumes everything goes smoothly.

What This Means for Your Pricing

Once you know your true hourly rate, you can make informed decisions:

Set a Target Rate

Decide what you actually want to earn per hour. £25? £40? £60? Work backwards to set prices that achieve this.

Identify Time Drains

Which invisible hours could you reduce? Could you streamline quoting? Batch your shopping? Create template menus?

Spot Unprofitable Bookings

Some events simply aren't worth it. A small booking with a long drive might leave you earning minimum wage—or less.

Justify Your Prices

When customers baulk at your quotes, you'll have the confidence that comes from knowing your numbers inside out.

Quick Calculation Worksheet

For your next booking, fill in these numbers:

1. Booking revenue: £_____
2. Direct costs: £_____
3. Proportional overheads: £_____
4. Total costs (2+3): £_____
5. Net profit (1−4): £_____
6. Event hours: _____
7. Invisible hours: _____
8. Total hours (6+7): _____
9. True hourly rate (5÷8): £_____

The Uncomfortable Truth

Many mobile vendors, when they first do this calculation properly, discover they're earning less than the national minimum wage. That's not a business—it's an expensive hobby.

But here's the good news: once you know the truth, you can fix it. Raise prices, reduce costs, work more efficiently, or focus on higher-value bookings. Knowledge is power.

Start tracking your true hourly rate today. Your future self—the one running a genuinely profitable business—will thank you.