What should I include in my hourly rate?

Your hourly rate needs to cover more than just your paycheck. You must include payroll taxes, workers comp, insurance, vehicle costs, tools, software, and rent. If these costs are not baked into your rate, they come directly out of your profit.

What is the difference between billable and total hours?

Total hours are every hour you work (driving, quoting, admin). Billable hours are only the hours a customer pays for. According to industry data from the Service Council, most field service technicians bill only 60–70% of their total working hours. Pricing based on total hours instead of billable hours will cause you to undercharge — potentially by 30–40%.

How often should I raise my rates?

Review your rate at least once a year. Insurance, fuel, and material costs increase annually. A small annual increase of 3-5% keeps you ahead of rising costs.

Should I charge hourly or flat rate?

Both work. Hourly rates are simpler for time-and-material jobs, while flat rates protect your margin if you work efficiently. Many businesses calculate their internal hourly cost first, then use it to set profitable flat-rate prices.

What is a typical hourly rate for field service work?

It varies by trade and location. According to the Bureau of Labor Statistics (BLS), the median hourly wage for HVAC technicians is $25.19/hr and for plumbers $29.40/hr — but the billable rate charged to customers is typically 3–4x the base wage to cover overhead and profit. Typical customer-facing ranges: plumbers and electricians $85–$150 per hour, HVAC technicians $75–$130 per hour.

Find out if your hourly rate covers your true costs — and what you should actually be charging. Learn more

Hourly labor cost calculator

Find out if your hourly rate covers your true costs — and what you should actually be charging.

Your team

Number of technicians

Average hourly pay ($)

Benefits and tax rate (%)

Overhead

Annual overhead ($) (defaults to $0)

Utilization

Billable hours per day

Paid days off per year

Profit goal

Target profit margin (%)

Your rates will appear here, please add:

You set the rate. Workiz handles the rest — scheduling, dispatching, invoicing, and payments, all in one place.

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How to set a profitable hourly rate

Setting the right labor rate is the difference between growing a business and just buying yourself a job. If you do not account for non-billable time, taxes, and overhead, your bank account will always be lower than you expect. This calculator works from four numbers:

Loaded labor cost — What you pay each tech per hour, plus the payroll taxes and benefits on top of it.
Overhead — Insurance, van payments, tools, software, and rent for the year, spread across every billable hour.
Billable hours — The hours a day each tech spends on paying jobs, after paid days off. Quoting, driving, and paperwork are not billable.
Target profit margin — What the business keeps once every cost is covered.

From those it returns your true cost per billable hour and the rate you need to charge to hit that margin. Enter what you charge today and it also shows the gap — per hour, per tech per year, and across your whole crew.

Example: 5-tech HVAC company breakdown

Here is how a 5-technician HVAC company might calculate their hourly rate:

Average hourly pay	$30/hr
Benefits + taxes (25%)	+$7.50/hr
Loaded pay per hour	$37.50/hr
Annual overhead	$80,000
Billable hours/day	5 hrs
Paid days off	14 days
Billable hours/tech/year	1,230 hrs
Overhead per billable hour	$13.01/hr
True cost per hour	$50.51/hr
Profit margin (15%)	+$8.91/hr
Target hourly rate	$59.42/hr

If this company charges $50/hr instead of the $59.42 target, each tech loses $9.42 per billable hour. Across 5 techs working 1,230 hours each, that is $57,933 in missed profit per year.

Frequently asked questions