The Ultimate Guide to Pricing Field Service Jobs
Learn how to calculate overhead, burdened labor rates, and material markups to find the sweet spot between winning bids and making a profit.
The Danger of “Eyeball” Estimating
If you are walking onto a job site, looking around, and throwing out a flat number based on your “gut feeling,” you are likely leaving hundreds of dollars on the table every week.
Many field service professionals price their services by looking at what their competitors charge and trying to undercut them. But your competitor’s price has nothing to do with your business overhead, your labor costs, or your financial goals. To run a profitable business, you have to build your prices from the ground up.
1. Calculate Your True Overhead
Before you can price a job, you need to know how much it costs just to open your doors every morning. Overhead includes every expense that isn’t directly tied to a specific job:
- Vehicle payments, insurance, and fuel
- Software subscriptions (like Job Pilot)
- Marketing and advertising costs
- Office rent and utilities
- Your salary (the business owner needs to get paid, too!)
The Fix: Add up your monthly overhead and divide it by the number of billable hours your team works in a month. This gives you your hourly overhead burden.
2. Determine Your Burdened Labor Rate
If you pay a technician $25 an hour, their actual cost to your business is much higher. You have to factor in payroll taxes, worker’s compensation, health insurance, and non-billable time (like driving to the supply house or sitting in traffic).
The Fix: A standard rule of thumb is to multiply your employee’s hourly wage by 1.3 or 1.4 to find your “burdened” labor rate. That $25/hour tech actually costs you closer to $35/hour.
3. Standardize Your Material Markups
Clients aren’t just paying for the raw cost of a PVC pipe or a new blower motor. They are paying for your expertise to select the right part, the time it took you to drive to the supply house to get it, and the warranty you provide if it fails.
The Fix: Never sell parts at cost. Establish a standardized markup tier. For example