Price any service job with cost-plus pricing. Enter labor, materials, subcontractors, overhead and the margin you want, and get the job price, profit, hourly rate and invoice line items.
For freelancers, contractors and small service businesses · updated October 2026
Materials and subcontractors are billed at cost; overhead and profit sit in the hourly rate. Rounded to the cent.
How to use this service price calculator
- Enter the labor hours the job will take and what an hour of that labor costs you: wages plus payroll taxes, or the pay you want for yourself.
- Add materials and any subcontractor bills at what they cost you.
- Choose how to cover overhead: spread your monthly overhead over your billable hours, or add a percentage to the job's costs.
- Set the profit margin you want to keep, as a share of the final price.
- Copy the line items and paste them into your estimate or invoice.
The yellow panel shows the job price, your profit, the margin and markup it works out to, and the effective hourly rate you'd bill for the labor.
How to price services with cost-plus pricing
Cost-plus pricing adds up what a job costs you, then sets the price so a fixed share of it is profit. It works for any service job, from a plumbing repair to a website build, because it starts from your numbers instead of a guess.
Materials and subcontractors go on the invoice at cost. Overhead and profit ride on the labor line, so the calculator works out the hourly rate you bill and rounds it to the cent. That's why the margin can land a cent or two off your target.
Worked example
An 8-hour job, labor that costs you $35 an hour, $250 of materials, $2,000 of monthly overhead over 100 billable hours, and a 20% profit margin:
- Labor cost: 8 × $35 = $280.
- Overhead: $2,000 ÷ 100 = $20 per hour, × 8 hours = $160.
- Total cost: $280 + $250 + $160 = $690.
- Target price: $690 ÷ (1 − 0.20) = $862.50.
- Labor line: ($862.50 − $250) ÷ 8 = $76.56 an hour, so 8 × $76.56 = $612.48.
- Job price: $612.48 + $250 = $862.48, with $172.48 profit. That's a 20% margin and a 25% markup.
Your effective hourly rate here is $76.56, more than double the $35 the labor costs you. That gap is what pays for overhead and leaves a profit.
How to work out your overhead
Overhead is everything you pay to stay in business that isn't tied to one job: insurance, software, your phone, vehicle costs, rent, marketing, accounting. There are two common ways to put it into a price.
Per billable hour
Add up a month of overhead and divide it by the hours you actually bill in a month. Housecall Pro's example is $10,000 of monthly overhead over 160 billable hours, which is $62.50 an hour, so a 5-hour job carries $312.50 of overhead. Workiz describes the same method: total the month's costs except direct labor and materials, divide by billable hours, then multiply by the job's length.
The catch is the billable hours. If you work 40 hours a week but only invoice 25, divide by the 25. The billable hours calculator helps you get that number right.
As a percentage of job costs
If your jobs are mostly materials or subcontractors, a percentage can fit better. In the example above, 15% overhead on $530 of direct costs is $79.50. Total cost becomes $609.50, and the job price comes out at $761.84.
Typical profit margins and overhead for service businesses
There's no single right margin. These are the figures current pro pricing guides give, which make a good sense check for your inputs:
| Benchmark | Figure | Source |
|---|---|---|
| Net profit margin to aim for, field service | 15–25% (20% as a start) | Workiz |
| Profit margin, lawn care | 10–20% competitive suburban, 20–35% high-demand areas | Housecall Pro |
| Profit margin, house cleaning | 10–30% | Jobber |
| Average HVAC profit margin | 5–20% | Jobber |
| Overhead as a share of revenue | Around 35% or less | Housecall Pro |
| Labor burden on top of wages | 20–35% for solo operators and small crews | Housecall Pro |
| Labor burden on top of wages | 25–40% | Jobber |
Workiz also warns that pricing which keeps leaving you under 10% suggests overhead isn't fully counted. If that's you, check the overhead and labor cost inputs before you touch the margin.
Labor burden is why your labor cost rate should be higher than the wage. Someone you pay $25 an hour costs you more once payroll taxes, workers' comp and paid time off are added. For yourself, use the hourly pay you actually want to take home before tax.
Markup vs margin: which one to price with
Markup is profit as a share of your cost. Margin is profit as a share of the price. They describe the same dollars, but the percentages differ, and mixing them up is an easy way to underprice.
| Margin you want | Markup needed | Price on $1,000 of cost |
|---|---|---|
| 10% | 11.1% | $1,111.11 |
| 15% | 17.6% | $1,176.47 |
| 20% | 25% | $1,250.00 |
| 25% | 33.3% | $1,333.33 |
| 30% | 42.9% | $1,428.57 |
| 40% | 66.7% | $1,666.67 |
| 50% | 100% | $2,000.00 |
Add 20% to $1,000 and you get $1,200, which is only a 16.7% margin. To keep 20% of the price, you need to add 25%. The markup calculator and profit margin calculator convert between the two for any number.
Common service pricing mistakes
- Pricing at your wage. Charging $35 an hour because labor costs you $35 means overhead comes out of your pocket and there's no profit at all.
- Dividing overhead by every hour you work. Admin, quoting, driving and invoicing aren't billable. Spread overhead over billable hours only, or it's undercounted.
- Confusing markup and margin. A 20% markup is a 16.7% margin. Decide which one you mean before you set the number.
- Forgetting the subcontractor's share of your time. Finding, managing and checking a sub takes hours. Count them as labor hours on the job.
- Never checking the total. Work out how many jobs like this you need a month to cover your costs. The break-even calculator shows it in hours or jobs.
- Underestimating the hours. If jobs regularly run over, price from your actual past jobs, not from the best case.
How to put the price on an estimate or invoice
Clients want to see what they're paying for, but they don't need to see your overhead and margin. That's why the calculator bills materials and subcontractors at cost and puts everything else in the labor rate. A quote can go out as a regular document or message; estimates vs invoices explains when each one is right.
For a 24-hour job with labor at $40 an hour, $1,800 of materials, a $650 subcontractor, $3,000 of monthly overhead over 120 billable hours and a 25% margin, the calculator gives these line items:
- Labor: 24 hrs × $120.69 = $2,896.56
- Materials: $1,800.00
- Subcontractors: $650.00
- Total: $5,346.56
That's $1,336.56 of profit on $4,010 of cost. Add these line items to your invoice in Onigiri, where each line is quantity × rate, with tax rates and discounts if you need them. The free plan covers 3 invoices a month with unlimited clients, and the invoice goes out by email, as a link or as a PDF. PRO ($12 a month or $108 a year) adds unlimited invoices, saved item and service templates for the jobs you price often, and card payments through your own Stripe account with no Onigiri platform fee.
Frequently asked questions
How do you calculate the price of a service?
Add up labor hours times your labor cost, materials, subcontractors and a share of overhead to get the total cost. Then divide by one minus your target margin: a $690 job at a 20% margin is $690 ÷ 0.8 = $862.50.
What is cost-plus pricing for services?
Cost-plus pricing sets a price by adding profit on top of everything the job costs you, including overhead. It's the most straightforward way for a service business to make sure every job covers its costs.
What profit margin should a service business aim for?
Workiz suggests most field service companies aim for a 15–25% net profit margin, with 20% as a starting point. Margins vary by trade: Housecall Pro puts lawn care at 10–20% in competitive suburban markets and 20–35% in high-demand areas.
How do I include overhead in my price?
Divide your monthly overhead by the hours you bill in a month, then multiply by the job's hours. With $2,000 of overhead and 100 billable hours, every hour carries $20 of overhead, so an 8-hour job carries $160.
What is the difference between markup and margin?
Markup is profit divided by cost, and margin is profit divided by price. A $1,000 cost sold for $1,250 is a 25% markup but a 20% margin.
Should I show materials at cost on the invoice?
You can bill materials at cost and put your overhead and profit into the labor rate, which is what this calculator does. Some trades mark materials up instead. Either works as long as the total covers your costs and margin.
What is an effective hourly rate?
It's the job price minus materials and subcontractors, divided by the labor hours: what each hour of your work really bills at. In the default example it's $76.56 an hour, against a $35 labor cost.
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