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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.

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.

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.

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