Service Rate Lab

Transparent planning calculator

Service Rate Builder

Build a sustainable service rate from labor, billable capacity, overhead, and profit goals.

Private by design: calculations stay in this browser. No entries are saved or sent.
1 Labor
2 Productive and billable time

Paid hours include compensated time. Productive hours exclude leave and apply your productive share. Billable hours are the customer-chargeable portion of productive time.

3 Overhead

Enter the annual total for vehicles, workspace, business insurance, software, phones, accounting, marketing, tools, licenses, training, and administration.

4 Pricing target
Required selling rate$106.93 / billable hour

Break-even: $83.05 · Profit: $21.39/hour

Base compensation
$56,000.00
Loaded labor cost
$67,600.00
Labor burden
$11,600.00 (20.7%)
Cost / paid hour
$33.80
Cost / productive hour
$40.64
Cost / billable hour
$54.19
Overhead / billable hour
$28.86
Billable hours / year
1,247
Equivalent day rate
$855.44
Monthly revenue required
$11,115.42
Annual revenue capacity
$133,385.00
Target profit margin
20.0%
Transparent calculation breakdown

$56,000.00 base compensation + $11,600.00 burden = $67,600.00 loaded labor. After 152 paid nonproductive hours, productivity and utilization produce 1247 billable hours. Loaded labor plus $36,000.00 annual overhead produces a $83.05 hourly break-even cost. Contingency is added to cost, then margin and processing are recovered through division by the remaining revenue share.

Sensitivity check

See how combined shifts in utilization, overhead, and margin affect the rate.

ScenarioUtilizationOverheadMarginRequired rate
Lower case65.0%90.0% of current15.0%$112.09
Current75.0%100.0% of current20.0%$106.93
Higher case85.0%110.0% of current25.0%$104.14

When to use this calculator

Use this comprehensive planner when setting or reviewing your core rates. It is designed for owner-operators and small labor-based service businesses in the United States and Canada. It does not insert tax, payroll, insurance, wage, or statutory rates; enter values from your own records.

Formula and methodology

Required rate = (loaded labor + overhead per billable hour + contingency) ÷ (1 − target margin − processing rate).

All calculations retain full precision internally and round only for display. Owner compensation is a labor cost, not profit. Sales tax is not included as revenue or profit. Any overhead value is treated as the fixed allocation or cost identified by the field label.

Worked example

A technician with $61,000 in loaded labor and overhead, 1,200 billable hours, and a 20% margin needs more than the $50.83 break-even cost. Replace every example value with figures that reflect your business.

Common mistakes

  • Counting paid leave twice.
  • treating owner pay as profit.
  • assuming every paid hour is billable..

Limitations

This result is a planning estimate, not a market quote, forecast, tax calculation, or guarantee of profitability. It does not model demand, seasonality, competitors, collections, sales tax, or jurisdiction-specific obligations. Compare the output with actual bookkeeping records and consult qualified advisers when needed.

Frequently asked questions

Does switching USD and CAD convert my figures?

No. It changes the currency label only. Service Rate Lab does not use exchange-rate feeds and never changes assumptions when currency changes.

Are my entries uploaded?

No. Calculations run in your browser. Shared links include only nonpersonal calculator inputs in the URL.

Why is the result different from adding a profit percentage?

A target margin is a share of revenue. To preserve that share, divide cost by one minus the margin; multiplying cost by the percentage produces markup instead.

Related calculators

Fully Loaded Labor Cost Calculator

Add employer-paid costs to wages without confusing compensation with profit.

Billable Utilization Calculator

Separate paid, productive, and customer-billable time.

Overhead Recovery Rate Calculator

Allocate annual or monthly overhead across realistic billable hours.