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Service Business Pricing Calculator
Set a price for a job that covers labor, materials and overhead and still leaves the profit margin you want.
How this calculator works
The calculator adds labor cost (hours times hourly cost) and materials, then adds your overhead percentage. It then divides by one minus your target profit margin so that profit is a true share of the final price. Margin and markup are different: a 20% margin means profit is 20% of the price you charge, which needs a bigger markup than 20% on cost.
Example
A job takes 10 hours at $35 an hour of labor cost, uses $200 of materials, carries 15% overhead, and you want a 20% profit margin. The calculator shows: Price To Charge: $790.63.
Tips
- Overhead covers costs you pay no matter what, like insurance, vehicle, software and admin time. Estimate it as a percent of direct costs.
- Track actual hours on past jobs so your estimates get more accurate.
- Check your local market before you quote. If the price is much higher than competitors, work out where you can cut cost or add value.
Common questions
What is the difference between markup and margin?
Markup is added on top of cost. Margin is the share of the final price that is profit. A 25% markup gives only a 20% margin.
What should my overhead percentage be?
Divide your yearly overhead costs by your yearly direct costs for labor and materials. Many small service businesses end up between 10% and 30%, but yours may differ.
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Results are estimates only. See our disclaimer.