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The calculator works out what one billable hour actually costs you, then adds your target margin. It runs in five steps: establish how many hours you genuinely bill, total those across your crew, cost labor including burden, spread overhead across those hours, and divide by your margin. Every figure below comes from the inputs above.
Start from hours worked per year, subtract paid time off converted into hours, then remove the share of what's left that never gets billed — driving, callbacks, estimates, meetings.
(hours per year − days off × hours per work day) × (1 − non-billable %)
At the defaults: 2,080 − (30 days × 8 hrs) = 1,840 hours, then 1,840 × 60% = 1,104 billable hours per technician.
Overhead is carried by billable hours rather than by headcount, so the whole team's billable total is what matters.
billable hours per technician × number of field technicians
Wages alone understate what an hour costs you. Payroll taxes, health contributions, and retirement contributions are added as a burden percentage on top of the base wage.
average hourly pay × (1 + burden %), where burden % = (payroll taxes + health + retirement) ÷ wages
Every annual overhead cost — insurance, vehicles, shop, utilities, marketing, office — divides across the billable hours you actually sell.
total annual overhead ÷ total billable hours
Your true cost per hour is labor plus overhead. The rate is that cost divided by one minus your margin — not your cost plus a markup percentage. This is where the money usually goes missing.
(labor cost per hour + overhead cost per hour) ÷ (1 − profit margin)
A $70 true cost at a 30% margin is $70 ÷ 0.70 = $100 per hour. Adding 30% to $70 would give $91, which is only a 23% margin.
Margin is a share of the price you charge; markup is a percentage added to your cost. Adding 30% to a $70 cost gives $91 and a 23% margin, not 30%. To actually earn a 30% margin you divide by 0.70 and charge $100. This calculator works in margin, which is why its recommended rate comes out higher than a markup calculation would.
The starting figures are a full-time technician working 2,080 hours a year on 8-hour days, with 10 vacation days, 10 holidays, 5 sick days, and 5 training days, and 40% of the remaining time non-billable. That 40% is typical for service work, where travel and estimating consume real hours. Every one of these is an editable input — if your crews run four 10-hour days, change hours per work day to 10 before you read the result.
We've loaded example numbers—adjust anything to match your business. Green borders show defaults; after you edit a field it highlights in orange.
Enter your current business assumptions. These inputs feed the next steps of your pricing model.
Techs + owner/operator billing for their time in the field (or billable office time).
Updates from payroll wages and your technician and hours settings.
Updates from your payroll tax and contribution entries below.
Enter as a whole percent (e.g. 30 for 30%).
Category totals on the right roll up from your P&L inputs below. On the left, add or rename miscellaneous lines.
Click a line name to edit it. Dollar amounts follow each label.
These totals come from operating expenses (not editable here).
Used to spread overhead across billable hours for your recommended rate.
Define technician availability and non-billable time assumptions.
Default full-time hours.
Converts days off into hours (default 8).
Default days not worked.
Default paid holidays.
Default sick days per year.
Default safety / licensing / meetings.
Driving, callbacks, estimates, meetings (default 40% for service contractors).
Used to spread overhead and estimate annual revenue impact.
Use the example numbers below or replace them with your own P&L expense amounts. Income lines are excluded.
We'll email your breakdown and next steps. Adjust inputs above first for accurate numbers.