Service pricing calculator
Calculate how much to charge for your services
How to use this calculator
Enter your service details, time requirements, and costs to calculate your breakeven rate and profit margins. All figures should be entered excluding VAT.
1. Service details: Enter your service name and the number of billable hours you expect to deliver.
2. Time costs: Calculate the cost of your time and any team members involved in delivering the service.
3. Direct costs: Include any additional costs directly related to delivering this service.
4. Fixed overheads: Enter the portion of your fixed costs this service should cover.
5. Pricing: The calculator will show your breakeven rate, then you can enter your selling price to see profit margins.
1. Service details
Start by naming your service and specifying how many billable hours you expect to deliver. This helps calculate your hourly breakeven rate and profit.
Total number of hours you'll spend delivering this service
2. Time costs
List all people involved in delivering this service. For each person, enter the number of hours they'll spend and their hourly cost. For yourself, consider what you want to earn per hour before profit. For employees, use their hourly wage plus any employment costs.
3. Direct costs
Include any additional costs directly related to delivering this service. Examples include software subscriptions used specifically for this client, travel expenses, materials provided to the client, subcontractor fees, and any other costs that wouldn't exist if you weren't delivering this specific service.
4. Fixed overheads
Overheads are your ongoing business costs that aren't directly tied to making a specific product. These include rent, utilities, insurance, marketing, professional fees, and general administrative expenses. Start by adding your monthly overheads together (see the boxout for some examples). It’s important to include all overheads, or you risk pricing your product too low. You then need to decide what portion of these costs this product should cover.
How to calculate: There are several approaches to allocating overheads for services:
- Time-based: If this service takes 10% of your monthly billable hours, allocate 10% of your monthly overhead costs.
- Revenue-based: If you expect this service to generate 20% of your monthly revenue, allocate 20% of your monthly overheads.
- Per-service allocation: Divide your monthly overheads by the number of services you typically deliver in a month.
Total overhead costs allocated to this service
Overhead examples
- Office rent/workspace costs
- Utilities (electricity, internet)
- Insurance
- Marketing & advertising
- Professional memberships
- Software subscriptions (general use)
- Administrative expenses
5. Breakeven analysis
This section shows you the minimum price you need to charge to cover your costs. The direct cost breakeven only covers time and direct costs, while the total breakeven includes your overhead allocation. You should always price your services above the total breakeven point to ensure profitability.
Total direct costs
£0.00
Time costs + direct costs
Total costs (incl. overheads)
£0.00
Direct costs + overheads
Direct cost hourly rate
£0.00
Minimum hourly rate to cover direct costs
Total breakeven hourly rate
£0.00
Minimum hourly rate to cover all costs
6. Profit analysis
Enter your intended service price (excluding VAT) to see how much profit you'll make. The profit margin shows what percentage of your selling price is profit. For service businesses, healthy profit margins typically range from 20% to 50%, depending on your industry and expertise level.
The total price you'll charge for this service, before adding VAT
Your service price divided by billable hours
Gross profit
£0.00
Service price - direct costs
Net profit
£0.00
Service price - all costs
Profit margin
0%
(Net profit ÷ service price) × 100
Profit per hour
£0.00
Net profit ÷ billable hours
Next steps:
- Read our essential guide to pricing.
- Read more about pricing your service.
- Read ten FAQs on how to price goods and services.
© Start Up Donut. All calculations are estimates and should be used as a guide only.
Service Pricing Summary
Prepared using Start Up Donut pricing calculator