Independent · No sponsored coveragePrices verified 24 October 2026
Field Ops Weekly

Tool

What to charge per billable hour.

Most service businesses set an hourly rate by looking at what the shop down the road charges. This works it out from the other end: what your hours cost, how many of them a customer actually pays for, and the profit you want left over.

Payroll taxes, workers' comp, benefits — as a share of wages.

Paid hours a customer is actually invoiced for. Driving, shop time and callbacks are not.

Trucks, fuel, insurance, rent, office staff, marketing, software.

The figures filled in are an example to show the method — replace every one with your own. They are not industry averages.

Charge per billable hour$111.24
Break-even per hour$94.55
Revenue needed / year$416,471

How the rate is worked out

  1. Paid hours per tech per year = hours per week × 52.
  2. Labour cost = techs × wage × paid hours × (1 + burden).
  3. Total cost = labour cost + annual overhead.
  4. Billable hours = techs × paid hours × billable share.
  5. Break-even rate = total cost ÷ billable hours.
  6. Price = break-even ÷ (1 − target profit). Profit is a margin on the price — see the markup vs margin calculator for why that matters.

With the example figures: three techs at $30 an hour, 25% burden and 40 paid hours a week cost $234,000 a year. Add $120,000 of overhead and the business costs $354,000 to run. At 60% billable, those techs bill 3,744 hours a year, so every billable hour has to bring in $94.55 just to break even, and $111.24 to leave a 15% profit.

The number that moves the rate most

Billable share. Raise it from 60% to 80% with everything else unchanged and the rate needed falls from $111.24 to $83.43 — not because anyone works harder, but because fewer hours are lost to driving, waiting for parts and going back to fix a job. Routing, dispatch and first-time-fix rates are where that time is won or lost, which is the case for scheduling software in one sentence.

Software is overhead too. The software cost calculator prices the six main platforms for your exact team, including card fees, so the overhead figure above can be a real number rather than a guess.

What this does not tell you

Whether the market will pay it. If the rate this produces is well above what customers in your area accept, the answer is rarely to charge less — it is to raise the billable share, cut overhead, or price by the job instead of the hour so efficiency stays with you.