Flat rate or time and materials?

Flat rate prices the job; time and materials prices the hours. Flat rate protects you from the job that takes longer than expected and rewards a tech who is fast, and it is what most successful service operations move to. But it only works if the price was built from real cost data, which is what this calculator is for — a flat rate guessed from what the competitor down the road charges is just their guess with your costs attached.

What should I use for the loaded labour rate?

Not the wage. Wage plus payroll tax, workers comp, benefits, and adjusted for the hours you pay but cannot bill. The true cost per billable hour calculator on this site works it out; most contractors find it is forty to seventy percent above the wage.

Why does the truck cost so much per call?

Because it is doing very little of the time. Payment, insurance, fuel, maintenance, tyres and the stock on board are paid whether the truck runs three calls or five, so every unproductive hour raises the cost of the productive ones. The cost per mile calculator breaks that figure out properly if you want it separately.

Free tool

Service call price calculator

A service call is not an hour of labour. It is drive time, a stocked truck, a dispatcher, and a tech you paid for whether or not the job was there. Price it as an hour and you lose money on the short ones.

Method reviewed by Darren Lim, US CPALicence CPA.74253602

Free · No email required · Nothing leaves your browser

Price to make 15% net

$327

That is $218 per hour actually on site — because only 67% of the time this call consumes is spent there.

Labour2.25 hrs at $46.00 loaded$104

Truck$95 a day across 4 calls$24

Parts$85

Direct cost per call$212

Break-even priceCovers the call and its share of overhead. No profit.$265

Price at 15% net$327

One more call a day would drop the price toSame costs, spread over more revenue. Utilisation moves this more than your rate does.$319

Effective rate on siteWhat the customer feels they are paying per hour$218

Not sure of your loaded labour rate or your truck cost? Work out the rate or the truck. Nothing you type is sent anywhere.

What a call actually consumes

The wrench turning is the smallest part. A single service call consumes the drive there and often the drive back, the time at the supply house when the part is not on the truck, the paperwork, the dispatcher who booked it, and the share of the day nobody billed because two calls cancelled.

Which means the honest unit is not "an hour of a tech". It is a call, including everything around it. Price by the hour on the wrench and every short job loses money while looking like it made some.

Calls per day is the number that moves everything

The single biggest lever in this calculation is not your rate. It is how many billable calls a truck genuinely completes in a day. Going from three to four spreads the same fixed daily cost across a third more revenue and drops the required price per call substantially.

It is also the number owners are most optimistic about. Count actual completed, invoiced calls per truck over a full month from your dispatch software rather than from memory — the gap between the remembered figure and the real one is usually one whole call a day.

The diagnostic fee question

A diagnostic or trip fee exists to make the short call viable and to filter tyre-kickers. Whether you waive it when the work is approved is a marketing decision, not an accounting one — but it must be a decision, because "waived if we do the work" changes the economics of every call your techs quote and lose.

If you waive it routinely, model the price with the fee at zero and see whether the call still clears. If it does not, the fee is not a fee, it is the margin, and waiving it is giving the job away.

Common questions

Flat rate or time and materials?: Flat rate prices the job; time and materials prices the hours. Flat rate protects you from the job that takes longer than expected and rewards a tech who is fast, and it is what most successful service operations move to. But it only works if the price was built from real cost data, which is what this calculator is for — a flat rate guessed from what the competitor down the road charges is just their guess with your costs attached.
What should I use for the loaded labour rate?: Not the wage. Wage plus payroll tax, workers comp, benefits, and adjusted for the hours you pay but cannot bill. The true cost per billable hour calculator on this site works it out; most contractors find it is forty to seventy percent above the wage.
Why does the truck cost so much per call?: Because it is doing very little of the time. Payment, insurance, fuel, maintenance, tyres and the stock on board are paid whether the truck runs three calls or five, so every unproductive hour raises the cost of the productive ones. The cost per mile calculator breaks that figure out properly if you want it separately.

What we do about it

Revenue and cost tracked per truck and per tech every month, with emergency work separated from scheduled — so the price you set is checked against what the calls actually produced rather than assumed to still be right.