Break-even hourly rate
Your owner pay, payroll, payroll burden, and overhead divided by the hours you can realistically bill each year. Charge less than this rate and part of those costs goes unpaid.
Free Service Pricing Calculator
Calculate your break-even hourly rate, recommended hourly rate, job price, and expected profit. Built for contractors and service businesses.
Your pricing result
Choose Calculate to see your price and every step of the math.
Fill in your numbers, then choose Calculate to see your price and the math behind it.
Recommended quote
Expected profit:
Minimum break-even hourly rate
Suggested hourly rate
Break-even job price
Expected profit
Target margin
Total worker-hours
Quote breakdown
- Labor and overhead$0.00
- Materials$0.00
- Travel$0.00
- Subcontractors$0.00
- Other direct expenses$0.00
- Profit$0.00
How we got there
What-if scenarios
Choose a scenario to see how the same quote would affect profit and margin.
What your pricing result means
The calculator separates the price needed to cover your business from the price needed to leave the profit margin you chose.
Suggested hourly rate
The hourly rate that covers your break-even rate and leaves your target profit margin. It uses margin math, so a 20% margin is not the same as a 20% markup.
Recommended quote
The job's hours at your break-even rate, plus job costs, priced so your target margin holds. Expected profit is what is left after those costs.
How to price service work with fewer surprises
Start with the business you need the work to support
A rate based only on a technician's wage misses the rest of the business. Owner pay, non-billable payroll, insurance, vehicles, software, office costs, and admin still need to be paid. Start with what the business needs for the year, then spread that across the hours you can actually bill.
Margin and markup answer different questions
Margin shows what share of the selling price remains as profit. Markup shows profit relative to cost. They are not interchangeable.
Example: A $100 cost sold for $125 produces $25 of profit. That is a 20% margin ($25 ÷ $125) and a 25% markup ($25 ÷ $100).
Use realistic billable hours
A 40-hour workweek rarely means 40 billable hours. Travel, estimates, callbacks, stocking, training, scheduling, and paperwork consume time. If you divide annual costs by too many hours, the hourly rate will look lower than the business actually needs.
Keep direct job costs visible
Materials, mileage, permits, subcontractors, equipment, disposal, and other job-specific expenses belong in the quote. If a cost only happens because you took the job, include it before applying the target margin.
Check discounts against profit, not just revenue
A discount reduces the selling price while most job costs stay the same. That makes the percentage drop in profit larger than the percentage discount. Use the scenarios above before offering a reduction, and change the scope or costs when the resulting margin no longer works.
Service pricing calculator FAQs
Does this calculator use markup or margin?
It uses profit margin. A $100 cost with a 20% target margin requires a $125 selling price, because the $25 profit is 20% of the $125 selling price. Adding only 20% to cost would produce a 16.7% margin.
Should owner pay be included when setting service prices?
Yes. Decide what the business should pay you for the year, then include that amount with payroll and overhead before dividing by billable hours. Profit is calculated on top of your pay.
Why are billable hours lower than total working hours?
Travel, estimates, training, scheduling, callbacks, and administration take time that usually cannot be invoiced directly. Using realistic billable hours spreads annual costs across the hours customers can actually be charged for.
Does the recommended quote include materials?
Yes. It includes the labor and overhead allocation plus the materials, travel, subcontractor, and other direct expenses you entered, then calculates the selling price needed for your target margin.