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True Trade Path

Calculator · Free

Job Pricing Calculator

Build a defensible price from labor, materials, overhead and your target profit margin.

Labor
hrs
hrs

Bill it or absorb it — either way it costs you.

$/hr
38%

Employer taxes, workers' comp, liability, benefits, vehicle.

Materials & outside cost
$

Your actual cost, before markup.

25%

Covers procurement, stocking, returns and warranty handling.

$
$
Overhead & profit
28%

Rent, insurance, admin, software, marketing, unbilled time.

20%

Margin on the selling price, not markup on cost.

Quote this job at

$1,333

Yields 27.9% net margin, or $372 of profit.
Effective rate billed
$222/hr
Total direct job cost
$751
Overhead recovered
$210
Net profit
$372
Break-even priceBelow this, the job loses money
$961
Where the money goes
ComponentAmountShare of price
Burdened labor$30923.2%
Materials (at cost)$42031.5%
Material markup$1057.9%
Subcontractors$00.0%
Permits & fees$00.0%
Warranty reserve$221.6%
Overhead recovery$21015.8%
Net profit$37227.9%
Quoted price$1,333100.0%

Pricing structure looks sound

You are billing 5.03× burdened labor cost, which is inside the normal range for residential service work.

Quick answer

To price a trade job with a target margin, add direct labor (burdened hours × shop rate), materials with markup, permits and subs, then apply overhead and profit on top of that subtotal — or use your break-even revenue plus desired profit for the period. A job priced from wage alone usually ignores utilization, overhead, and warranty callbacks. Use the calculator to build line items and margin; adjust shop rate first if every job feels tight at the end of the month.

What this assumes

  • Overhead is recovered as a percentage of direct job cost, the most common small-contractor method.
  • Labor cost is burdened — it includes payroll taxes, insurance and benefits, not just the hourly wage.
  • Target profit is calculated as a margin on the selling price, not a markup on cost.

Important

Pricing below your break-even point loses money faster the more work you win. Run the break-even calculator before you set a rate.

Understanding the result

Why most trade businesses underprice

The usual mistake is pricing from the wage you pay rather than the burdened cost of that hour. A technician earning $30 an hour costs the business closer to $42 once payroll taxes, workers' compensation, liability insurance, vehicle and benefits are included — and that is before any overhead recovery.

Billable hours are not working hours

A technician on the clock for 2,080 hours a year bills far fewer. Drive time, shop time, warranty callbacks, training and slow weeks all come out of that. Overhead must be recovered across the hours you actually bill, which is typically 60 to 75% of paid hours.

Margin, not markup

A 20% markup on cost produces about a 16.7% margin, not 20%. Price against the margin you need on the selling price. The markup-versus-margin calculator makes the conversion explicit.

Flat-rate books eliminate guesswork

Once you know your average hours and material cost for common jobs, build a flat-rate price book. A water heater swap at $1,200 flat covers 80% of installations profitably and flags the 20% that need a custom quote due to access, code upgrades, or unusual configurations.

How the math works

Direct labor hours × loaded labor rate + materials at cost × material markup + subcontract + permit + overhead recovery + profit target = proposed price. Toggle T&M vs fixed price to show contingency buffer.

Where to find each input

  • Takeoff — hours from experience or estimator
  • Material quote — supplier invoice or catalog
  • Sub bids — scoped trade-outs
  • Permit fee — AHJ schedule

Worked examples

Service panel upgrade 200A

16 hr labor loaded $95, materials $1,800 at 1.25 markup, permit $250, 15% OH, 12% profit.

Price roughly $4,800–$5,400 depending on markup policy.

Bathroom fan replace

2.5 hr, $120 materials, minimal OH solo shop.

Price $450–$650 — trip minimum may dominate.

GC managed bath remodel sub-heavy

Subs $38k, GC 15% coordination + overhead.

GC price ~$43,700 before profit — verify margin on subs per contract law in your state.

What this does not include

  • Sales tax collection rules
  • Bonding on public work
  • Design liability
  • Warranty reserve accrual

Regional adjustment

Loaded labor rate input should reflect your metro — national defaults are placeholders only.

Accuracy and references

Markup/margin math cross-check markup-margin tool; structure aligns with PB-10 pricing guides.

Counterpart bridge

What homeowners see for the same decision

Homeowners use the paired tool for benchmarks and questions before they hire. Align your numbers with what they are already comparing against.

Open Contractor Quote Analyzer

Homeowner counterpart

We publish Contractor Quote Analyzer for the same decision from the customer side — use it to sanity-check how your bid will read against national ranges.

View Quote Analyzer

Common questions

What profit margin should a trade business target?
Net margins of 8 to 15% are typical for established residential service contractors, with gross margins on labor of 40 to 55%. Below that, there is no cushion for a bad month or a warranty claim.
How do you price a plumbing job?
Estimate labor hours × burdened rate, add material cost with markup, apply overhead recovery (25 to 35% of direct cost), then add target profit margin (15 to 25%). A 4-hour water heater swap with $400 in materials: $160 labor + $480 materials + $160 overhead + $120 profit = $920 to $1,100.
How much should I charge for labor?
Charge your shop rate — the hourly rate that covers burdened labor cost, overhead, and profit. For most residential service contractors, that is $95 to $150/hour depending on trade and market. A $35/hour wage with 65% utilization and $5,000/month overhead on one truck requires roughly $110/hour.
What is a fair markup on materials?
Material markup of 15 to 30% is standard. Small parts (fittings, wire nuts) often carry 50 to 100% markup because procurement time exceeds part cost. Large equipment (water heaters, panels) carries 10 to 20%. The markup covers sourcing, warranty risk, and carrying inventory.
How do you price a bid job versus time and material?
Bid jobs carry more risk — price 15 to 25% higher than your estimated cost to cover unknowns. Time and material jobs recover actual cost plus markup with less risk but less upside. Use flat-rate pricing for common service calls (panel swap, water heater) where you know the hours.
Should I include overhead in my job price?
Yes. Overhead (rent, insurance, truck, software, owner salary) must be recovered on every job. Apply 25 to 35% overhead on direct job cost, or build it into your shop rate. A job priced at direct cost only loses money once overhead is allocated.
How much should I charge for a service call?
A service call minimum of $95 to $175 covers the first hour including travel. Additional hours at your shop rate. The service call fee ensures windshield time is paid even if the job takes 20 minutes. Shops without a trip fee need a higher hourly rate to compensate.
What is burdened labor cost?
Burdened labor cost is the employee's wage plus employer taxes (7.65%), workers' compensation (5 to 15%), liability insurance, vehicle, benefits, and training. A $30/hour technician typically costs the business $40 to $48/hour burdened. Price from burdened cost, not base wage.
How do I price a job I have never done before?
Estimate hours generously (add 25% for unknowns), price materials at cost plus markup, apply overhead, and add margin. Track actual hours on the first three jobs of that type and adjust the template. Underpricing a new job type three times in a row is an estimating error, not bad luck.
What is flat-rate pricing for contractors?
Flat-rate pricing sets a fixed price for defined tasks regardless of actual time. A panel upgrade is $2,500 flat whether it takes 4 or 8 hours. Flat-rate rewards efficiency and gives customers price certainty. Build flat-rate books from your actual average hours plus margin on each task type.
Fixed price vs T&M?
Fixed includes contingency; T&M needs not-to-exceed cap for homeowners.
How much contingency?
10–15% on remodel, 5% on repeat service tasks.
Markup on materials?
Common 1.15–1.35× cost; heavy equipment higher.
Do I profit on subs?
GC markup on sub work varies — disclose if regulated in your state.
What overhead percent?
15–25% of direct cost typical small shop — use your P&L.
How to price travel?
Built into rate or explicit trip charge — do not zero it.
Should I show line items to customer?
Transparency reduces disputes; hide markup if policy uses single line.
How compare to quote analyzer?
Homeowners benchmark your bid there — align scope language.
Lost leader jobs?
Model at full rate — decide discount deliberately.
Change orders?
Same formula with signed addendum — never verbal only.

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