Labor Rate Calculator

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HVAC Business Tool

Labor Rate Calculator

Estimate the true hourly labor rate you should charge by factoring in wages, benefits, overhead, billable utilization, and profit—so you’re priced to grow, not guess.

Burdened hourly cost (wage + taxes/benefits)

Overhead per billable hour

Recommended retail rate to hit your profit target

Disclaimer: Results are estimates based on your inputs and are for planning purposes only. Actual costs and margins can vary by team, region, and job conditions.

Tech hourly wage*

This is the base hourly pay you give a technician before taxes or benefits. Don’t include overtime here — just their straight hourly rate. Example: If your techs make $28/hr, enter 28.

Payroll tax and benefits percent*

This covers the hidden costs of having an employee: Payroll taxes (FICA, FUTA, SUTA) Workers comp insurance Health, dental, vision benefits Retirement contributions Paid time off (vacation, holidays, sick days) Enter this as a percentage of hourly wage. Typical ranges are 20–35%.

Annual overhead cost*

What to include: All the business costs not tied directly to wages but needed to run operations: office rent, utilities, insurance, vehicles, fuel and maintenance, phones and tablets, software, admin salaries and management, marketing, uniforms, tools, and training. Enter your total for one year.

Range guidance: If you are not sure, use $30,000–$50,000 per field technician per year as a starting point.

2 techs → $60,000–$100,000
3 techs → $90,000–$150,000
4 techs → $120,000–$200,000
5 techs → $150,000–$250,000
6 techs → $180,000–$300,000
8 techs → $240,000–$400,000
10 techs → $300,000–$500,000
12 techs → $360,000–$600,000

Number of technicians*

How many field technicians you employ. This helps divide overhead across the actual workforce doing billable hours.

Billable utilization percent*

Not every paid hour is billed to a customer. Time gets lost to: Driving between jobs Callbacks and warranty work Training, meetings, and paperwork Job prep and downtime A good benchmark is 55–70%. Enter the percentage of a tech’s paid time that actually produces revenue.

Please enter a number less than or equal to 100.

Work weeks per year*

How many weeks a technician is available to work. Standard is 48–50 weeks (subtracting holidays, vacation, and sick days).

Please enter a number less than or equal to 52.

Hours per tech per week*

Average weekly hours per technician. 40 is standard, but if overtime is consistent you might use 42–45.

Target profit margin percent*

The net profit you want to earn on labor after all costs. Many HVAC contractors target 20%-35%. Enter the percent you want your hourly rate to generate in profit.

Please enter a number less than or equal to 100.