For shops selling maintenance, repair, calibration, machining or installation: enter crew, tool and vehicle costs, utilization and taxes to get the hourly rate, mileage rate and minimum call-out, with a sample quote.
Pre-sizing and estimating tool: results do not replace design, calculations or reports signed by a licensed professional, nor verification against the applicable codes and standards.
Costs per billable hour (technicians, tools, overhead and vehicle if built in) and what the rate carries "built in": taxes, selling and margin.
Monthly fixed costs are spread over billed hours: with fewer billed hours, each hour must cost more.
A job with the hours, technicians, distance and materials from "Sample quote".
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Add up the month’s costs (loaded technician cost, tools, overhead and, if you choose, the vehicle), divide by the hours that will actually be billed and build in taxes, selling expenses and margin: rate = cost ÷ (1 − sum of percentages). In the example, 2 technicians billing 65% of 160 hours sell 208 hours a month at a cost of $99.36 each; with 20% built in, the rate is $124.20.
Because almost all cost is fixed each month: technicians are paid with or without calls. If only half the hours are billed, each billed hour must pay for the other half. In the example the rate would be $161.46 at 50% utilization and $107.64 at 75%. The company breaks even at 55% utilization at $124.20.
Either bill mileage separately or build the vehicle into the hourly rate. Billing per mile is fairer for near and far customers: in the example the van costs $0.91 per mile and mileage is billed at $1.14 with margin built in. Technician travel time is also a cost and can be billed at the full or a reduced rate.
The minimum hours billed on any call, because preparing the visit, loading tools and invoicing take time even on a quick job. In the example, 2 hours come to $248.40, plus travel. Preventive maintenance contracts usually have their own pricing with scheduled visits.
It depends on the state: most states do not tax repair and maintenance labor, some do, and parts billed on the invoice are usually taxable. Enter the rate that applies to labor in your state, or 0%. Income tax on profit is not part of the rate calculation.
A 6-hour job with 2 technicians, 40 miles away with 1 hour of travel each way and $300 of parts comes to $2,438.10: labor, travel time, mileage and parts with a 20% markup. After commissions, $354 is left as profit, 14.5% of the invoice.
It uses monthly averages and a single utilization for the whole crew. It does not separate regular, overtime and weekend hours or price specialties and emergency calls differently; work those out from your own cost. Defaults are illustrative: use your company’s figures.
Important notice: Indus Metrics tools produce estimates and pre-sizing results from the data you enter and from published engineering methods. They do not replace design, calculations or reports signed by a licensed professional engineer (PE), nor verification against the applicable codes, standards and regulations, such as OSHA rules and the ASME codes. Material and fuel properties vary: check manufacturer data or your own process analyses before deciding. By using this site you agree to the Terms of Use.
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