How Much to Charge for Home Care Per Hour (With the Math)
Build your private-pay hourly rate from caregiver wage, payroll burden, unpaid-but-paid time, overhead and margin. Worked example and national benchmarks.
By Caregiver Scheduling Team ·
Most non-medical home care agencies should charge somewhere between 1.8 and 2.1 times the caregiver’s hourly wage for private-pay care. The exact number comes from five inputs: the caregiver’s wage, payroll taxes and insurance on that wage, paid time you can’t bill, office overhead, and the margin you need. For reference, the 2025 CareScout Cost of Care Survey puts the national median for non-medical in-home care at $35 per hour.
What goes into an hourly bill rate?
Every billed hour has to cover more than the hour of care. Here are the five layers, from the bottom up.
| Layer | What it covers | How to find your number |
|---|---|---|
| Caregiver wage | The base hourly pay | Your pay scale. The BLS national median for home health and personal care aides was $17.21/hour in May 2025 |
| Payroll burden | Employer FICA, FUTA, state unemployment, workers’ comp, paid sick leave | Typically 13%–22% of wages before benefits. See what each caregiver hour really costs |
| Paid, non-billable time | Travel between clients, training, orientation, supervisory visits | Pull 3 months of payroll and divide non-billable paid hours by billable hours |
| Overhead | Office staff, rent, insurance, software, marketing, licensing | Annual overhead ÷ annual billable hours |
| Margin | Profit and cash cushion | Your target; many owners aim for 10%–15% net |
A worked example
An agency in a mid-cost market pays caregivers $18.00/hour.
| Step | Calculation | Per billable hour |
|---|---|---|
| Wage | $18.00 | |
| Payroll burden at 17% | $18.00 × 1.17 | $21.06 |
| Non-billable paid time at 8% | $21.06 × 1.08 | $22.74 |
| Overhead | $310,000 a year ÷ 36,000 billable hours | $8.61 |
| Fully loaded cost | $31.35 | |
| 12% net margin | $31.35 ÷ 0.88 | $35.63 |
So this agency should quote about $36/hour. At $30/hour it would lose money on every visit, even though $30 looks like a healthy markup over an $18 wage.
Why short visits need a higher rate or a minimum
Travel time, check-in, and documentation take roughly the same time whether the visit is one hour or four. On a one-hour visit with 20 minutes of paid drive time, non-billable time is 33% of the visit, not 8%. That’s why most agencies set a 2–4 hour visit minimum, or charge a higher rate for visits under 3 hours. Write whichever you pick into the client service agreement.
Should rates differ for nights, weekends and holidays?
If you pay caregivers a differential, bill one. A $2/hour weekend differential with 17% burden adds $2.34 to your cost per hour, so the bill rate needs about $2.65 more at a 12% margin. Holidays at time-and-a-half are the same math on a bigger number. List the holidays in the service agreement so there’s no argument in December.
How do you compare to your local market?
Price inside your local range, not the national one. CareScout publishes state and metro medians, and the spread is wide: in 2025 state medians ran from about $24/hour to about $46/hour. Sitting 5–10% above the local median is defensible if you can explain what’s different, for example guaranteed backup coverage, consistent caregivers or GPS-verified visits the family can see.
When to raise rates
Raise rates when any input moves: a minimum wage increase, a new workers’ comp quote, a pay raise to stay competitive for caregivers. Give clients 30 days’ written notice, show the reason, and keep raises to once a year where you can.
How Caregiver Scheduling handles this
Every visit has verified check-in and check-out times, and route optimization cuts the drive time between visits that eats into your non-billable layer. Timesheets and private-pay invoices built from those same verified visits are coming soon, so the hours you pay and the hours you bill will come from one record. Plans are $199/month for up to 10 caregivers or $299/month for up to 50, with a 30-day free trial.
FAQ
What is a good gross margin for a home care agency? Gross margin is the bill rate minus caregiver wages and payroll burden, as a share of the bill rate. Many private-pay agencies run 35%–45%. Below 30% usually leaves too little to cover office costs.
Should I charge the same rate for companion care and personal care? Many agencies charge $1–$3/hour more for hands-on personal care, especially if they pay caregivers more for those skills or certifications.
Can I charge a different rate to long-term care insurance clients? Yes. The policy pays a daily or monthly benefit up to a limit, and the client owes the rest. Bill your normal rate and give the client what they need to file the claim.
How often should I recalculate my rate? At least once a year, and whenever wages, insurance or overhead change by more than a few percent.