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Work out what one billable hour really costs you

From numbers you already have. Nothing you type leaves this page.

  • A technician's wage and paid hours
  • Insurance, workers' comp and benefits
  • Your yearly overhead: rent, office, software
  • The paid hours your techs cannot bill

Defaults are US figures, each with its source below.

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Switching country clears monetary inputs. Enter your own local costs; currencies are not converted.

Prefilled values are illustrative starting assumptions, not recommendations for your business. Replace them with your own figures. All fields are required except the current billed rate.

01The person behind the work

Start with one technician. Use their wage and paid hours to build a rate you can explain.

$ / paid hourGross wage, before employer costs.
hours / technicianExample: 40 hours × 52 weeks. Include paid leave.
hours / billed day8 hours is an editable assumption, not a trade benchmark. Day rate = required hourly rate × billable hours in the day.
% of wageReplace this starting assumption with your payroll rate.
$ per $100 of payroll (from your policy)No default: the rate depends on your state, class code and claims history. Enter the rate your policy states.
for a published reference rate · not a valuePick your state to see its published reference rate. Use the rate on your policy.
02What keeps that technician running

Enter annual dollars per technician. A field left at $0 excludes that cost and lowers your estimate.

$ / technician / yearHealth insurance, retirement, and other benefits. Exclude payroll taxes and paid leave already counted above.
$ / technician / yearFinancing or depreciation, fuel, maintenance, and insurance.
$ / technician / yearTools, replacements, and equipment allocated to this technician.
$ / technician / yearCourses and certifications. Avoid counting wages twice.
03The hours that pay for the business

Recover paid time and company overhead through the hours you actually bill.

% of paid hoursTravel, parts runs, meetings, paid leave, and warranty work.
techniciansInclude an owner who bills field hours. This assumes the same annual billable capacity per technician.
$ / company / yearRent, office staff, marketing, and software. Exclude technician costs already entered.
% of selling priceThe share of your billed rate remaining after the costs in this model.
$ / billable hour · optionalAdd this to see your gap against the calculated rate.

No account needed. No inputs sent to a server. This page does not save your calculation; leaving or reloading it clears the result.

Keep this number right, every job

Wages, insurance and fuel move your cost every year. In Operadox your rate stays current and every quote starts from it. Free during the beta.

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Method and sources

Every default names its source, so you can open it and check.

Part of the hourDefaultWhat it isSource
Wage$33.00 / hNational average HVAC tech wageACCA
Payroll taxes9%7.65% federal FICA, plus about 1.35% unemployment tax (an estimate)IRS
Workers' compYour policyNo default: enter the rate on your policy, in $ per $100 of payrollYour figure
Benefits19.2% of wagesInsurance plus retirement, construction tradesBLS ECEC, June 2026
TruckUnknownNo public source: you enter itNo public source
ToolsUnknownNo public source: you enter itNo public source
TrainingUnknownNo public source: you enter itNo public source
Non-billable time25%Driving, waiting for parts, warranty: 18–32% of paid hoursIndustry estimate
OverheadYoursRent, office, software and marketing, spread over billable hoursYour figure
Margin8%On the selling price. Average HVACR net profit is 6%; companies with 10+ trucks average 8% (ACCA)ACCA
Show the formulas
employer burden / h   = wage × (payroll taxes % + workers' comp %)
annual items / h      = (benefits + truck + tools + training) ÷ paid hours
direct cost / h       = wage + employer burden + annual items
billable hours        = paid hours × (1 − non-billable %)
recovered direct / h  = direct cost × paid hours ÷ billable hours
overhead / h          = overhead ÷ (billable techs × billable hours)
full cost / h         = recovered direct + overhead
rate                  = full cost ÷ (1 − margin %)      margin on price
rate with markup      = full cost × (1 + margin %)      lower real margin

Each part explained: the labor burden guide · markup vs margin · all guides

Calculator questions

What goes into the calculation?

Everything a billable hour has to pay for. Start with the tech's hourly wage, plus employer payroll taxes as a percentage of that wage and the workers' comp rate on your policy, in $ per $100 of payroll. Add yearly benefits, truck, tools and training. Then enter paid hours, non-billable time (driving, waiting on parts, warranty work), company overhead, how many techs share that overhead, and a target margin. Use your real payroll, insurance and operating records. Example values are placeholders, not a recommendation for your business. A cost left at $0 is left out.

How is the hourly rate calculated?

Yearly direct cost = wages for all paid hours + employer burden + yearly benefits, truck, tools and training. Billable hours = paid hours × (1 − non-billable time %). Loaded hourly cost = yearly direct cost ÷ billable hours + company overhead ÷ (billable techs × billable hours). Required billing rate = loaded hourly cost ÷ (1 − target margin %). The model assumes the techs who share overhead bill about the same hours; if some roles are very different, run them as separate scenarios. Don't count a cost twice, once under the tech and again in overhead.

Why isn't margin the same as markup?

Margin is worked out on the selling price. Markup is worked out on cost. As an example, a $100 cost with a 20% markup sells for $120, which leaves a 16.67% margin. A 20% margin on the same cost needs a $125 selling price. Mix them up and every price comes out short. The calculator shows both so you can see the difference. Its target margin comes after labor costs and overhead in the model; it isn't a guarantee of your company's net margin.

What does the gap with my current rate mean?

It compares the rate you charge with the calculated rate. A positive gap means you charge less than your hours cost plus your target margin. A negative gap means you charge more. The yearly figure is the hourly gap multiplied by one tech's billable hours. It's a rate comparison at fixed inputs, not a forecast of extra revenue or profit, and it doesn't predict customer demand.

What should I check before I use a result?

Check payroll taxes, your insurance class and experience modifier, your yearly cost totals, paid hours and realistic billable hours. Confirm how overhead is split and that no cost is counted twice. The result is a planning estimate built on your inputs: go over the assumptions with the professionals you already work with, like your accountant, before you change your prices.

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