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Labor rate
calculator.

Add overhead to payroll with burden, divide by billable hours to break even, then divide by 1 minus your target net to get the rate to charge.

Your numbers

The people whose hours you bill.

Base pay, before taxes and benefits.

Opens on 43.8%: benefits over wages for private construction employers. BLS, Employer Costs for Employee Compensation, June 2026, table 4

40 hours a week for 52 weeks is 2,080.

Holidays, vacation and sick days.

Time on a job you can charge for. Drive time and shop time do not count.

Everything but tech payroll and job materials.

The share of each billed dollar you want to keep.

Your answer

Estimate

Fill in your numbers

The answer opens here as you type. No email needed.

  • Technicians, still needed
  • Average hourly wage, still needed
  • Burden on wages, done
  • Paid hours a year, per tech, still needed
  • Billable share of hours worked, still needed
  • Yearly overhead, still needed
  • Target net profit, still needed
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This is an estimate worked from the numbers you typed. It is not financial or legal advice.

Email me the rate

  • Your rate to charge and your break-even rate
  • The hours and payroll behind them
  • A sheet you can print for the next price review
Jobs or deals a month
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Reading the answer.

Rate to charge

What one billed hour has to bring in for the year to hit your target net. It is a floor for pricing, not a market rate.

Break-even rate

Below this rate each billed hour loses money, however busy the board looks.

Billable share

The input that moves the rate most. Raise it from 40% to 60% in the example and the rate falls by a third.

The math.

A sample shop runs 5 techs at $28 an hour with a 43.5% burden, bills 40% of hours worked, and carries $250,000 in overhead.

The formula

Hours worked per tech
paid hours − hours off
Billable hours, team
hours worked × billable share × technicians
Payroll
technicians × wage × hours worked × (1 + burden)
Break-even rate
(overhead + payroll) / billable hours
Rate to charge
break-even rate / (1 − target net)

This is an estimate worked from the numbers you typed. It is not financial or legal advice.

The sample numbers

Technicians
5
Average hourly wage
$28
Burden on wages
43.5%
Paid hours a year, per tech
2,080
Paid hours off a year, per tech
136
Billable share of hours worked
40%
Yearly overhead
$250,000
Target net profit
15%

What they come to

Labor rate to charge, an hour
$193.82
Break-even rate, an hour
$164.75
Hours worked a year, per tech
1,944
Billable hours a year, team
3,888
Payroll with burden
$390,549.6

The sources.

Private construction employers paid $36.13 an hour worked in wages and $15.84 in benefits in June 2026. $15.84 over $36.13 is 43.8% of wages.

BLS, Employer Costs for Employee Compensation, June 2026, table 4

Those benefits include $2.63 an hour of paid leave, so this page counts payroll on hours worked. Counting paid hours as well would charge leave twice.

BLS, Employer Costs for Employee Compensation, June 2026, table 4

ServiceTitan calls a 30% billable share good for most service companies and 50% extremely efficient. Its own example also divides by 1 minus the net goal: $62.29 / 0.70 = $88.99.

ServiceTitan, HVAC labor rate calculator

Your questions

What is burden?

What an hour of wages really costs on top of the wage: payroll taxes, insurance, retirement and paid leave. The page opens on the BLS figure for private construction. Use your own if you have it.

Why does payroll count every hour worked, not only billable hours?

Because you pay for the drive time and the shop time too. ServiceTitan’s published example multiplies its loaded rate by billable hours only, which leaves those hours out of the rate.

What goes in overhead?

Everything that is not tech payroll or job materials: office wages, rent, trucks, insurance, software and marketing.

Will the BLS figure change?

Yes. BLS updates it each quarter and says it will take workers’ compensation out of the series from its December 2026 data. We recheck it when that lands.

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