Your break-even labor rate is total cost per technician divided by the hours that technician actually bills. Every unbilled hour, whether driving, waiting or doing paperwork, gets spread over the billed ones. Nothing you enter is saved or sent.
The formulas
- Loaded labor = wage × (1 + burden) × paid hours
- Total cost per tech = loaded labor + overhead allocated to that technician (vehicle, tools, insurance, office, software, marketing share)
- Billable hours = paid hours × billable share
- Break-even rate = total cost ÷ billable hours
- Rate at target margin = break-even ÷ (1 − margin)
Margin here means profit as a share of the price, which is why it divides rather than multiplies. A 15% markup and a 15% margin aren't the same number.
The lever most pricing ignores
Look at the last box. Raising the billable share by ten points lowers your break-even rate without touching the wage or the overhead. Most of the unbilled share in a field service day is drive time and idle time between jobs. That makes scheduling a pricing decision: every hour moved from the road to the job is an hour that carries your costs instead of adding to them. The pricing guide covers flat-rate versus time-and-materials on top of this number.
What to take away
- Divide total cost by billed hours, not paid hours.
- Margin divides, markup multiplies. Don't mix them up.
- Raising the billable share lowers break-even as surely as cutting cost.
Common questions
How do I calculate my labor rate for a service business?
Add up the full yearly cost of a technician (loaded wage plus allocated overhead), divide by the hours you actually bill, then divide by one minus your target margin. The calculator above does it step by step.
What billable share should I assume?
Measure your own. Take billed hours over a month and divide by paid hours for the same period. If you can't, start conservatively and refine it.
Is my data stored?
No. Everything runs in your browser.