Service Pricing Calculator

The calculator builds a price from the bottom rather than from the market. Delivery time multiplied by the hourly rate gives the labour in the job; consumables are added, and together they are the direct cost — what this service costs you only because you did it. Your overhead allocation is then applied to that, bringing in the share of rent, power, software and admin the job has to help carry. The result is the cost to deliver.

From there, two prices. The minimum is the cost to deliver: sell at that and the job has paid for itself and produced nothing. The second applies the margin you typed — and the arithmetic is where people slip, because margin is profit as a share of the price, not a percentage added to cost. A price built by adding a percentage always earns less than that percentage suggests. Type in a current price and the last line shows what it is genuinely earning.

The staff rate decides whether any of this is true. It wants a loaded rate — the wage plus what the wage drags along with it. The lookup beside the field carries statutory minimums only, and a legal floor is not a rate card: look your classification rate up at the regulator and type it in. If you deliver the service yourself, use what you would pay someone else to do it. Leave it lower and the service reads as profitable only because the labour is unpaid — a subsidy, not a margin.

There is no figure here to aim at, and that absence is deliberate. We hold published, sourced benchmarks for what businesses in named industries spend on labour as a share of turnover — those sit with the wages calculator, publishers and periods attached. Nobody we would cite publishes a target margin for a service business, and the only honest source for one is your own accounts. The boxes here start at values that let the tool compute; they are placeholders, not advice.

So the tests are internal, and sharper than a benchmark would be. Every service should clear its own cost to deliver — not the average across the menu, each one. Averages are where loss-makers hide: a business can sell more of its worst service every year without noticing, because the month still ends roughly level.

Then look at the mix. A thin-margin service that fills the diary can earn less across a week than a slower one priced properly. The question is not which service is most popular but which hour of your capacity earns the most once the cost to deliver is paid. And check the price against your break-even floor: covering its own cost is not the same as covering the business.

If a service does not clear its cost, there are four moves and it is worth knowing which you are making. Raise the price. Reduce the time it takes, usually the largest lever, because labour is most of the direct cost. Reduce what the job consumes. Or stop selling it, which is a legitimate answer more often than owners allow.

What does not work is volume. Underpricing cannot be grown out of — each additional sale reproduces the shortfall, so a busier month is a bigger one. If the margin is negative, growth is the most expensive thing you can do next.

The other common error is lifting every price by the same percentage because the business needs more money. It treats a menu as one thing when the calculator has just shown you it is not: the services underwater are usually specific, and usually the ones where the time taken has quietly grown since the price was set. And a competitor's price tells you what they charge, not what it costs them — pricing against it answers a different question.