Pricing & Profit calculator
Service Pricing Calculator
Work out the price a service job or package needs to hit if you want to cover labour, overhead, and a target profit margin.
Why use it
- Useful when you need to start from cost recovery instead of guessing a sell price.
- Margin is calculated on the final selling price, not on cost. That matters because markup and margin are not the same thing.
- This tool gives you a required price. You can still adjust upward for urgency, complexity, or risk.
Calculator tool
Use the service pricing calculator
Work out the price a service job or package needs to hit if you want to cover labour, overhead, and a target profit margin.
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Important note
BizTools.au is designed to make business numbers easier to check, but calculator outputs still need judgment and real-world context.
- Calculator results are general estimates only and depend on the figures entered.
- Examples and summaries are provided for general information, not legal, tax, accounting, payroll, or financial advice.
- Before relying on a result for a real decision, check your assumptions and get qualified advice where needed.
How it works
Understand the formula before you use the result
The calculator uses a simple working formula so you can sense-check the result quickly and explain it clearly inside your business.
Service pricing formula
Labour cost = labour hours × hourly internal cost
Total cost = labour cost + overheads allocation
Required price = total cost / (1 - desired profit margin %)
Profit amount = required price - total cost
Margin % = (profit amount / required price) × 100
The desired profit margin must stay below 100%, otherwise no selling price can satisfy the formula.
Worked example
See the numbers in a realistic scenario
Use the example below as a sense check when you compare the calculator result to a real quote, sale, or pricing decision.
Worked example
Worked example: pricing a small service package
A business expects 12 labour hours at an internal cost of $65 per hour, wants the job to recover $250 of overhead, and is targeting a 30% margin.
- Labour hours: 12
- Hourly internal cost: $65
- Overheads allocation: $250
- Desired profit margin: 30%
Calculation steps
- Labour cost = 12 × $65 = $780
- Total cost = $780 + $250 = $1,030
- Required price = $1,030 / (1 - 30%) = $1,471.43
- Profit amount = $1,471.43 - $1,030 = $441.43
To land a 30% margin on those assumptions, the service needs to be priced at about $1,471.43.
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FAQ
Common questions about the service pricing calculator
These are the practical questions operators usually run into when they apply the result to a real business decision.
Why does margin use the final price instead of cost?
Margin is the share of the final selling price left after cost. That is why a 30% margin needs a higher selling price than a 30% markup on cost.
Should overhead allocation always be included?
Usually yes. If the work does not recover a fair share of overhead, the business can look busy while still missing the profit target.
Can I use this for packages as well as jobs?
Yes. It works for any service scope where you can estimate labour effort, cost recovery, and the margin you want to protect.
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Guides for Pricing & Profit
Use these articles if the result needs more context before you change a quote, price, staffing decision, or cost assumption.
How to Price Services for Profit
Build service prices from cost, overhead, and target profit so the job still works after delivery.
Price for profitHow to Set a Sustainable Hourly Rate
Set an hourly rate that covers income goals, overheads, and real billable hours instead of copying someone else’s number.
Set your hourly rateHow to Calculate Cash Flow Runway
Measure how many months of runway the business has left based on current cash, revenue, and monthly burn.
Check your runway