MarginWorkshopCrew Cost & Required Billable Rate
Turn your per-worker loaded labor rate into a per-crew, per-hour cost, then see what you have to charge per crew-hour to hit your target margin.
How we got here
- Crew labor cost = loaded rate × crew size = $32.5 × 2 = $65
- Total cost = crew labor cost + overhead = $65 + $0 = $65
- Required billable rate = total cost / (1 - margin) = $65 / 0.80 = $81.25
Required rate at other margins
| Margin scenario | Required rate |
|---|---|
| Bare (10%) | $72.22 |
| Modest (15%) | $76.47 |
| Typical (20%) | $81.25 |
| Healthy (25%) | $86.67 |
| Strong (30%) | $92.86 |
Shared fields save automatically as you edit them. Review or edit everything in one place in your Business Profile, so every engine starts pre-filled.
Next Decision
Based on your results, these related decisions are available.
- Job Profit CheckYou know what to charge per crew-hour, now check a specific bid against it.
- Crew Contribution MarginYou know what to charge per crew-hour, now see what that actually nets across a full year.
- Revenue per Crew BenchmarkUse your required billable rate to see whether this crew is actually producing what it should.
- Revenue per Field EmployeeUse your required billable rate as the benchmark for revenue per employee.
- Apprentice-to-Journeyman Ratio EconomicsUse your required billable rate to value the journeyman's freed-up time.
- First Manager / Working Foreman Break-EvenUse your required billable rate to value the owner's freed-up time.
- Office Manager / Dispatcher Break-EvenUse your required billable rate to value the owner's freed-up time.
- Estimator Hire Break-EvenUse your required billable rate to value the owner's freed-up time.
- Operations Manager Break-EvenUse your required billable rate to value the owner's freed-up time.
- Additional Truck Break-EvenUse your real required billable rate to price out the truck's incremental revenue capacity.
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Methodology
Formula: crew labor cost = loaded rate × crew size. Total cost = crew labor cost + overhead allocated per crew hour. Required billable rate = total cost / (1 - target margin).
Assumption: overhead per crew hour defaults to $0 until you've run Overhead Allocation & Break-Even Revenue, at which point that engine's real number should replace the placeholder.
Limitation: this is a rate, not a bid. See Job Profit Check to verify a specific bid actually clears a profit once real job costs are counted.
Guide: The Loaded Labor Cost Guide, the loaded rate this required rate is built on top of.
Frequently Asked
- Why isn't the loaded labor rate the price to charge?
- The loaded rate is what a crew costs; overhead per hour still needs to be recovered on top of that before any margin is added, otherwise every billable hour quietly loses money on overhead.
- How is overhead per hour determined?
- It comes from spreading total annual overhead across expected billable hours; a business with fewer billable hours per year needs a higher overhead-per-hour recovery on each one.
- What happens if I bill below the required rate?
- Every hour billed below this rate is either not fully covering overhead or not covering crew cost at all, a real, cumulative loss even if individual jobs look profitable on paper.
- Does this already include profit margin?
- No, this is the cost-recovery floor, labor plus overhead only; your target margin still needs to be added on top to get an actual bid price.