Labor rate and break-even calculator

Put in what your techs cost, what the shop costs each month and the hours you really bill. You get the hourly rate that breaks even, the rate for the profit you want, and the labor sales you need each month.

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Your techs

Count yourself if you bill hours too.

Their average. On your own? What you’d pay yourself an hour.

% on top of pay

Payroll taxes, workers’ comp, health insurance, paid time off.

Their hours
hours
hours: 65% of 40

The hours on invoices, not on the clock. Driving, the supply house, callbacks and quotes aren’t billed.

The shop

Everything but techs’ pay and parts: rent, trucks and fuel, insurance, software, phones, marketing, office pay, and your own pay if you’re not in the field.

% of the price

What’s left of each dollar after every cost.

To break even, charge

$113.25an hour

What each billed hour costs you, with unbilled hours and overhead in.

For 20% profit, charge

$141.56an hour

Labor sales a month to break even
$38,279
Billed hours a month
338

Labor only. Parts go on top, with their own markup: markup and margin calculator.

To break even, $113.25 an hour. For 20% profit, $141.56 an hour.

Where each hour’s price goes

A tech who works 40 hours a week and bills 26 is paid for 14 hours no customer pays for. Each billed hour has to carry them, the taxes and benefits on all 40, and its share of the month’s overhead, before any of it is profit.

How it’s worked out

With 3 techs paid $30.00 an hour, 30% on top for taxes and benefits, 40 hours worked and 26 billed a week each, $18,000 of overhead a month and 20% profit:

  1. A tech’s hour on the clock: $30.00 pay + 30% = $39.00
  2. Spread over the hours they bill: $39.00 × 40 ÷ 26 = $60.00
  3. Billed hours a year: 3 techs × 26 × 52 weeks = 4,056
  4. Overhead a billed hour: $18,000 × 12 ÷ 4,056 = $53.25
  5. To break even: $60.00 + $53.25 = $113.25
  6. For 20% profit: $113.25 ÷ 0.8 = $141.56
  7. Labor sales a month to break even: $113.25 × 4,056 ÷ 12 = $38,279
$141.56 an hour, split up
  • Pay for the billed hour $30.00
  • Pay for unbilled hours $16.15
  • Taxes and benefits $13.85
  • Overhead $53.25
  • Profit $28.31

The hourly rate $141.56

What moves the rate

The same example, one number changed at a time:

  • Billed hours. If each tech billed 30 of their 40 hours instead of 26, the break-even would drop from $113.25 to $98.15 an hour: the same pay and overhead, carried by more hours a customer pays for.
  • Pay. A $2 raise for every tech adds $4.00 to each billed hour, once the taxes, benefits and unbilled hours that come with it are counted.
  • Overhead. Every $1,000 a month of overhead adds $2.96 to each billed hour. Leaving a cost out of overhead doesn’t make it cheaper, only the rate that pays for it too low.

Billed hours start as calls. A call nobody answers is work that never reaches an invoice: the missed call calculator puts a rough monthly figure on yours.

Questions about labor rates

Pricing parts? Use the markup and margin calculator.

What should a plumber, electrician or HVAC tech charge an hour?

Whatever your own costs say. Two shops in the same town can need very different rates, because their overhead and the hours their techs bill are different. Put your numbers in the calculator: it gives the least you can charge without losing money on labor, and the rate that leaves the profit you want. Then check it against what other shops near you charge.

What are billed hours?

The hours a customer pays for. A tech on the clock for 40 hours a week also drives, picks up parts, waits at the supply house, goes back for callbacks and writes quotes, and no invoice pays for those. Count last month's billed hours from your invoices and divide by the weeks; if you price by the job, use the hours the jobs took.

What goes in overhead?

Everything the shop spends that isn't a tech's pay or a part on a job: rent, trucks and fuel, insurance, licenses, software, phones, marketing, office staff, and your own pay if you don't bill hours yourself. Add up a year from your books and divide by 12, so costs paid once a year, like insurance, are counted.

Does the rate include parts?

No, it's for labor. Parts go on the invoice at their own price, marked up to cover ordering, picking up, stocking and warranty returns. The markup and margin calculator works that price out.

Is profit the same as markup?

No. Here, profit is a share of the price. At a $113.25 break-even, 20% profit means charging $141.56, and $28.31 of it is profit. Adding 20% to $113.25 gives $135.90, which leaves only 16.7% of the price as profit.

I work in the field myself. What do I put in?

Count yourself as a tech, and put in what you want to pay yourself an hour. Leave your own pay out of overhead, so it isn't counted twice. The hours you spend on quotes and the office are hours you work but don't bill.

I charge flat rates. Does this still help?

Yes. A flat-rate price is the hours a job usually takes at your hourly rate, plus the parts at their marked-up price. The rate from this calculator is the hourly number to build your price book on.

Page updated October 22, 2026.

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