Field Service Hourly Rate: How to Calculate What to Charge

Add up everything it costs to keep one technician working for a year:

• Technician pay. Wages, overtime, payroll taxes, benefits and paid time off. Build it with the loaded-cost method from your payroll figures.
• Vehicle. Payments or depreciation, fuel, insurance, maintenance, tolls, parking and tracking equipment.
• Tools and consumables. Hand tools, test equipment, uniforms, safety gear, and small parts you don't bill separately.
• Insurance and licensing. General liability, workers' compensation, trade licenses and certifications.
• Software and phones. Scheduling and invoicing tools, mobile devices and data plans.
• Overhead share. A fair share of office rent, admin and dispatch staff, marketing and management time.

Use last year's actuals wherever you can. Ask your accountant which costs belong in direct cost and which in overhead, and be consistent.

Start with 2,080 paid hours for a full-time employee, then subtract what you can't bill:

1. Subtract paid holidays, vacation and sick time.
2. Subtract training, safety meetings and shop time.
3. Subtract drive time between jobs, unless you charge for travel.
4. Subtract admin time, such as reading job notes, ordering parts and closing out paperwork.
5. What remains is the billable time you can charge for. Divide it by paid hours to get billable utilization.

Track this from your job data. If your team logs on-site and drive time on every job in a tool such as Jobber or Housecall Pro, you can see actual utilization instead of a guess. Utilization varies by trade and route density, so measure yours.

Say a technician costs the following in a year. In this example, loaded pay is $70,000, vehicle costs are $12,000, tools and consumables are $3,000, insurance and licensing are $4,000, and an overhead share is $15,000. In this example, the total is $104,000.

Now the hours. In this example, 2,080 paid hours minus 300 for time off and training leaves 1,780. Say driving and admin take about 30 percent of that, so billable hours are about 1,250.

In this example, cost per billable hour is $104,000 divided by 1,250, or about $83. In this example, to earn a 20 percent margin on price, divide by 0.8, which gives about $104 an hour. That's your target rate before any market check.

Notice how sensitive it is. In this example, if utilization falls and billable hours drop to 1,000, the same costs push the break-even rate to $104 and the target rate to $130. Route planning and scheduling matter as much as pricing.

The calculated rate is a floor to work from, not the price you must charge. Check it against reality:

• Competitor rates in your area. Call or read public price lists, and note the difference between hourly and flat-rate models.
• Job type. Emergency, after-hours and specialty work can justify higher rates than routine maintenance.
• Customer type. Commercial customers on contracts may accept a lower rate in exchange for volume, while residential customers often prefer flat prices.
• Parts and materials. Decide your markup policy separately, and don't hide overhead in hourly labor if your parts pricing already covers it.
• Local rules. Some jurisdictions have licensing or disclosure requirements for estimates and pricing, so check with your state or trade association.

If your calculated rate sits well above the market, look at cost and utilization before you cut prices. If it's below, you may have room to raise it.

Many customers prefer a fixed price. Convert by estimating the time each common job takes, including a fair share of travel and the typical complications, then multiply by the hourly rate and add parts. Review the resulting price list against how long the jobs actually take.

Track actual time against estimates for a few months. If jobs run over, either your estimates are low or your team needs coaching. Compare how each field service platform records job time in this platform comparison, and read the technician dispatch board setup guide to raise utilization through better routing.

For related reading, see field service scheduling automation with Housecall Pro.

At least once a year, and whenever a major cost changes. Compensation rises over time. The BLS Employment Cost Index reports total compensation for civilian workers up 3.4 percent over the 12 months ending March 2026¹, and fuel, insurance and parts costs move on their own schedules.

Set a yearly calendar reminder to update the inputs, and adjust rates before the busy season, not during it. Communicate increases to customers clearly and in advance.