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Start with available hours per tech: 2,080 standard work hours minus paid days off, times 8. Multiply that by your utilization rate to get billable hours per tech, then by tech count for total billable hours across the team. Divide total payroll cost plus overhead by that total for a break-even rate, then divide the break-even rate by 1 minus your target profit percent to get the rate that hits your profit goal.

30 percent is a common, realistic baseline for field trades, since travel, estimates, and paperwork eat into the day before any of it turns billable. 50 percent is considered very efficient. Set it too high and the calculated rate undercharges for the hours that get billed, because it assumes more paying work than a tech's day realistically holds.

Overhead is the fixed and variable cost of running the business outside of technician payroll and job materials: rent, insurance, office staff payroll, utilities, software, marketing, and vehicle costs not tied to a specific job. Technician wages and job materials are tracked as their own separate inputs, so folding them into overhead would double-count them and push the rate above what the math calls for.

Because a real chunk of a tech's paid day goes to work nobody pays for directly: driving between calls, writing up a free estimate that doesn't close, a warranty callback, stocking the truck, and the paperwork that follows every job. None of that produces revenue, so it comes out of available hours before the billable rate gets calculated, not after the fact.

Break-even is what a shop needs to charge per billable hour to cover payroll and overhead exactly, with nothing left over. Profitable rate builds a target net profit into that same number by dividing the break-even rate by 1 minus the profit percentage. Charging the break-even rate keeps a shop from losing money. Charging the profitable rate is what funds growth.

More paid days off shrinks available hours per tech, which shrinks billable hours at the same utilization rate, which shrinks total billable hours for the whole team. The same overhead and payroll cost then get spread across fewer billable hours, so the rate has to climb to cover them. A shop with a generous time-off policy needs a higher billable rate than one with less time off, everything else held equal.

Dividing accounts for the difference between margin and markup. Adding 30 percent on top of the break-even rate produces a markup measured against cost, and lands short of an actual 30 percent margin, since margin is measured against the final price a customer pays, not the cost underneath it. Dividing is the only way to land on a rate where profit is a full 30 percent of the price charged.

Yes. Overhead, average wage, utilization rate, and tech count all vary by trade and by region, so there's no single number that fits every shop. Enter your own figures for your own business instead of an industry-wide average, and the rate that comes out reflects your actual cost structure, not someone else's.

Yes, no signup, no account, the result shows the moment you enter valid numbers.