Find out if you're actually making money—or paying customers to let you work for them.
This is what you want to pay yourself annually before taxes. Think of it as your "owner's salary"—separate from business profit. Include what you need for mortgage, bills, savings, and lifestyle.
Your fixed monthly business expenses: vehicle payment, insurance, fuel, tools, uniforms, phone, software subscriptions, licenses, warehouse rent, etc. Don't include job materials—those get billed separately.
Be honest! You don't bill while driving to the supply house. Most technicians can only bill 4-5 hours per 8-hour day.
This is your profit after paying yourself and all expenses. Industry standard is 10-20%. Higher margins give you a buffer for slow seasons, equipment breakdowns, and business growth.
Your Required Rate
$142/hr
to earn $100,000/year at 20% margin
Revenue Needed
$162,500
Billable Hours
1144
Enter what you actually charge customers per hour. If you use flat-rate pricing, divide your typical labor charge by the hours that job takes. For example: $400 labor ÷ 3 hours = $133/hr effective rate.
Total Annual Cost: $100,000 + ($2,500 × 12) = $130,000
Revenue Needed (Divisor Method): $130,000 ÷ (1 - 20%) = $162,500
Billable Hours: 2,080 hours × 55% = 1144 hours
Required Rate: $162,500 ÷ 1144 hours = $142/hr
Why the Divisor Method? The markup method (Cost × 1.2 for 20% profit) gives you 20% of your cost. The divisor method (Cost ÷ 0.80) gives you 20% of your price—real profit margin.
Tool powered by Blessed Arc Media - Web Design for Home Service Businesses