Job Costing and Pricing Sheet for Service Businesses
To price service work, find what an hour of labor really costs with payroll taxes and benefits, divide by the share of hours you bill, and add overhead per billable hour. That is your break-even rate. Divide it by one minus your target margin, and quote jobs from the result. This free spreadsheet does the math and checks each quote.
The pricing sheet (Excel)
Enter seven numbers and get your break-even and target rates. Check the rate you charge today, then quote a job with crew, hours, and materials. Opens in Excel, Google Sheets, or Numbers.
The worksheet (PDF)
The same method on paper, with a worked example beside a blank column for your own numbers. Useful for walking through pricing with a partner or your accountant.
What numbers do you need?
Seven inputs, most of which are in your payroll reports and last year's Profit and Loss.
- Average hourly wage
- What you pay the people doing the work, averaged across the crew. If you are the one doing the work, use what you would pay someone to replace you.
- Payroll burden
- Employer payroll taxes (7.65% FICA plus state and federal unemployment), workers' comp, and any benefits, as a share of wages. 18% to 30% is common; your payroll reports show the real figure.
- Paid hours per worker per year
- 2,080 for full time. Include paid time off, because you pay for those hours whether or not anyone bills them.
- Billable utilization
- The share of paid hours that land on an invoice. Drive time, training, callbacks, and slow days pull it down. 65% to 80% is typical for field service crews.
- Billable workers
- People whose hours you bill to customers. Do not count office staff; they belong in overhead.
- Annual overhead
- Everything that is not direct labor or job materials: rent, vehicles, fuel, insurance, software, marketing, office staff, and a fair salary for the owner.
- Target net margin
- Profit left after every cost, including the owner's salary. 10% to 20% gives you a cushion for slow months and money to grow.
A worked example
A hypothetical cleaning company with 4 cleaners at $20.00 an hour, 22% payroll burden, 75% utilization, $90,000 of annual overhead including the owner's salary, and a 15% target margin.
| Step | Formula | Result |
|---|---|---|
| Loaded hourly cost | wage x (1 + burden) | $24.40 |
| Labor cost per billable hour | loaded cost / utilization | $32.53 |
| Overhead per billable hour | overhead / billable hours | $14.42 |
| Break-even rate | labor + overhead per hour | $46.96 |
| Price per billable hour | break-even / (1 - margin) | $55.24 |
A two-person, three-hour clean with half an hour of drive time each and $18.00 of supplies comes to 7 labor hours and a quote of $408.30. At break-even cost the job costs $346.69, which leaves $61.60, or 15%. If this company charged $45 an hour because that is what competitors charge, it would lose money on every hour billed.
Hypothetical example for illustration, not a client result.
How to use the sheet
Find your fully loaded labor cost
Add payroll taxes, workers' comp, and benefits to the hourly wage. That is what an hour of labor really costs before anyone does any work.
Divide by utilization
Not every paid hour is billable. Divide the loaded cost by the share of hours you actually bill to get the labor cost behind each billable hour.
Spread overhead across billable hours
Divide annual overhead, including the owner's salary, by total billable hours for the year. Every billed hour has to carry its share.
Add them for your break-even rate
Labor cost plus overhead per billable hour is the rate where you neither make nor lose money. Anything below it loses money on every hour.
Divide by one minus your target margin
To keep a 15% net margin, divide the break-even rate by 0.85. Multiplying by 1.15 comes up short, because margin is measured against price, not cost.
Quote jobs from the rate, then check them
Multiply crew hours, including drive and setup time the job causes, by your rate. Add materials with markup. Compare the quote to the job's cost to confirm the profit is there.
For the thinking behind each step and the mistakes that sink most quotes, read how to price a service job so you actually make money.
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Job Costing & Pricing Sheet
Work out your true cost per billable hour, your break-even rate, and the price that hits your target margin, then quote a job from it.
Frequently Asked Questions
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