You do not bill every hour you pay for.
That is the whole problem with hourly rates. You pay for 2,080 hours a year and bill maybe 1,350 of them — but the overhead and the profit still have to come out of the hours you actually invoice. Price off paid hours and you are short before you start. Enter your numbers below.
What lands on the paycheck, per hour.
Taxes, comp, insurance, benefits. Work it out here.
Hours
The gap between these two is where the money goes.
Overhead and profit
Rent, trucks, software, admin pay, insurance — everything not charged to a job.
Price off paid hours instead of billable hours and you would charge $91.17 — a number that looks healthy against a $28 wage and quietly loses money all year.
Where 2,080 paid hours actually go
| Hours you pay for but cannot invoice | Typical |
|---|---|
| Holidays and PTO | 120 |
| Drive time between jobs | 200 |
| Shop, yard and loading | 130 |
| Estimating and bidding | 100 |
| Rework and warranty callbacks | 80 |
| Weather and downtime | 100 |
| Billable hours left | 1,350 of 2,080 |
These are starting numbers, not your numbers. Pull the real ones off last year's timesheets against last year's invoiced hours — that ratio is your utilization rate, and it is the single most useful figure in this whole calculation. Most residential crews land between 60% and 75%. If yours is under 60%, the fix is scheduling and drive time, not your rate.
One caution on overhead. The figure above is overhead per field employee — take your total annual overhead and divide it by the number of people who bill hours. Put your whole company overhead in against one employee and the rate comes out wild.
Do this at scale
One rate is a start. Every rate is a system.
A rate only holds if the burden behind it is current and the number actually reaches the bid. These two keep both true.
Labor Burden Calculator
Every employee and every burden component in one workbook. Update tax, comp and insurance rates once a year and every crew rate re-burdens itself.
Construction Estimating Spreadsheet
280+ line items across 20 phases, a four-layer markup calculator and a client-ready proposal, all built on your real labor cost instead of a round number.
Excel and Google Sheets · one-time purchase · single-business commercial license