How to Set Your Hourly Rate as a Handmade Seller (And Actually Pay Yourself)

There’s a version of this you’ve probably lived. You sit down to price a new product, you add up your materials, you feel okay about the number, and then you get to the bit where you’re supposed to put a value on your own time. And something shifts.

Maybe it feels presumptuous. Maybe you tell yourself you’d make this anyway. Maybe you glance at what competitors charge and decide your time can’t possibly be worth the gap. So you set your labor rate to zero, or something close to it, and move on.

This is the permission problem. And it’s the single most common reason handmade sellers end up busy but underpaid.

Nobody taught you how to value your own time. You were taught to love your craft, to price competitively, to not price yourself out of the market; not how to calculate what your hours are actually worth. That gap is what this post addresses.

If you already understand why labor costs matter and you’re looking for the formula to calculate it, head to our guide on how to calculate your handmade labor costs. This post focuses on something more foundational: how to decide what number to put in that formula in the first place.

What should I charge per hour for handmade work?

As a handmade seller, a fair starting hourly rate for skilled production labor is $20–$30/hr in most US markets, well above minimum wage, which compensates for skill, specialisation, and the fact that you’re also running a business.

That’s the short answer. But a number without a method is just a guess you feel okay about. The rest of this post walks through three ways to arrive at a rate that’s grounded in your actual situation.

Why the “just price for the market” advice breaks down

Before the methods, it’s worth understanding why the standard advice (check what your competitors charge, match the going rate) doesn’t solve the hourly rate problem.

When you copy a competitor’s prices, you’re inheriting whatever assumptions they made when they set those prices. If they’re ignoring their own labor (which most makers are), you’re just perpetuating a collective underpricing problem.

Market price tells you what customers are currently willing to pay. It says nothing about whether anyone who charges that price is actually making a sustainable living.

You need a rate that comes from your costs and your goals, not from what someone else decided to accept.

Method 1: Work backwards from what you need to earn (the floor)

This method gives you your minimum viable hourly rate: the lowest rate at which your business isn’t subsidising your customers.

Step 1: Estimate your essential monthly expenses. Not aspirational living; the actual baseline: rent/mortgage, utilities, groceries, healthcare, transport, debt payments. Add a small buffer for unexpected costs.

Example: $3,200/month

Step 2: Decide how many hours per month you want to work in your business. Be realistic: include making time, admin, photography, packing, customer messages.

Example: 120 hours/month (roughly 30 hours/week)

Step 3: Divide.

$3,200 ÷ 120 hours = $26.67/hr

That’s your floor: the minimum you need to earn per hour of business time to cover your basics.

One important note: this rate needs to cover all your business time, not just the hours you spend actually making. If you spend 40 hours making products and 80 hours on everything else in a given month, your hourly rate needs to be set against the full 120 hours; otherwise you’re effectively paying yourself below floor for the admin and logistics time.

Method 2: Use market wage benchmarks

If working backwards from expenses feels too abstract, anchor to what people in comparable roles actually earn.

Skilled craft production labor isn’t a mystery. There are real wages for people who do it. A few places to look:

• Bureau of Labor Statistics (BLS): Search for wage data by occupation code. Jewelers and precious stone workers, for example, earn a median of around $21/hr. Textile and fabric workers fall in the $18–$23/hr range. These are employment wages, not self-employment rates.
• Glassdoor and Payscale: Search for roles like “candle maker”, “ceramics technician”, “soap production specialist”. The results are patchy, but they give you a range.
• Craft guild rates: If you’re in a specialised field (glassblowing, furniture making, printmaking) professional guilds sometimes publish recommended rate ranges.

One important adjustment: these benchmarks are employment wages with employer-covered taxes and benefits. As a self-employed maker, you’re paying self-employment tax (roughly 15.3% in the US) plus your own business expenses. A common rule of thumb is to add 20–25% to any employment wage benchmark to arrive at a self-employed equivalent.

Example: A $22/hr ceramic technician employment wage → $27–$28/hr self-employed rate

Method 3: Set a desired wage target (the goal)

The third method doesn’t anchor to expenses or market rates. It starts with: what do you actually want your business to pay you?

This sounds indulgent, but it’s how you avoid a business that pays you poverty wages while looking successful from the outside.

Step 1: Decide on an annual income target. Think about what would genuinely make your business feel worth the effort.

Example: $60,000/year

Step 2: Estimate your productive working weeks per year (subtract holidays, sick days, slow seasons).

Example: 48 working weeks

Step 3: Estimate the hours per week that are directly billable to products (making time, not all business time).

Example: 20 hours of production time per week

Step 4: Divide.

$60,000 ÷ (48 × 20) = $60,000 ÷ 960 = $62.50/hr

That’s a making rate: what your production time needs to earn to hit your income goal.

This number can feel confronting. That’s actually the point. It forces you to see whether your current prices, at current sales volume, can get you there. Often, the answer is no. And that’s useful information: it tells you either that your prices need to rise, or your production efficiency needs to improve, or your income goal needs to be revisited.

Most makers discover that they haven’t been paying themselves minimum wage, let alone a living wage. Knowing that number is what makes it possible to change.

How to factor your hourly rate into your product pricing

Once you have a rate, plugging it into your pricing is the straightforward part. Here’s how it works in practice.

Candle maker example

Maya pours soy candles in batches of 40. Each production session takes 3 hours, including setup, fragrance measuring, wicking, pouring, cooling checks, and labeling.

She’s decided her hourly rate is $25/hr using Method 1 (her expenses floor).

Total labor per session: 3 hrs × $25/hr = $75
Labor per candle: $75 ÷ 40 candles = $1.88

Her materials cost per candle works out to $3.40 (wax, fragrance, wick, container). Her overhead allocation per candle is $0.60.

She sells candles for $22. That gives her a net margin (after all costs) of $16.12 per candle, or 73% of sale price. That’s a sustainable margin that includes paying herself.

Without the labor line, her apparent COGS would be $4.00, and she might feel comfortable selling at $15, leaving herself with no meaningful take-home.

Jewelry maker example

Ren makes sterling silver earrings individually, not in batches. Each pair takes about 45 minutes of production time.

She’s using Method 3 (desired wage target) and has set her rate at $30/hr, anchored to her $50,000/year goal with realistic production hours.

Labor per pair: (45 ÷ 60) × $30/hr = $22.50

Her materials per pair: $14.80 (silver sheet, findings, solder, polishing compounds). Overhead: $2.20.

She currently sells the earrings for $48. That gives her a margin of $8.50, about 18%. She’s not making minimum wage.

The math is uncomfortable, but it’s honest. Ren now knows she needs to either raise her prices (her work is clearly underpriced for the labor involved) or find ways to reduce her production time. Both decisions are better than not knowing.

For a full walkthrough of how pricing fits together: materials, labor, overhead, and markup — see our guide to pricing handmade products.

What happens when you don’t set a rate

It’s tempting to leave your hourly rate blank and just charge “what feels right” or “what the market will bear.” The problem is that this approach always ends up undervaluing your time.

Here’s why: when you set prices without a labor rate, you’re implicitly pricing your time at zero. You might feel like you’re making 60% margin on a product. But that 60% is covering your time, not profiting from it. When you account for the hours properly, the real margin is often much lower, sometimes negative.

Over months and years, this creates makers who are genuinely busy, growing their sales, getting good reviews, and slowly burning out because they’re not earning a sustainable income from all that work.

The hourly rate question isn’t a nice-to-have. It’s the difference between a craft business and an expensive hobby.

How Craftybase helps you track your labor rate

Craftybase lets you set your hourly rate directly in your account, then log production time against each recipe or batch. When you record a manufacture, Craftybase calculates your labor cost per unit automatically, using your actual time and your actual rate.

This means your product costs always include labor, not just materials. Your COGS reports reflect the true cost of each product. And you can see immediately when a product’s pricing isn’t covering what it actually costs you to make, including your own time.

If you’ve been running recipes in Craftybase but haven’t set an hourly rate yet, that’s the first thing worth doing. Even a rough starting rate is better than leaving it blank. You can refine it over time as you track your actual production time more carefully.

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