How it’s calculated
A time-and-materials quote adds up your direct costs, applies one overhead & profit markup, then adds sales tax.
Example: 2 workers × 8 h × $55 = $880 labor; materials $300; 1 trip × $40 travel. Direct cost = $1,220. 15% markup = $183, subtotal $1,403. 7% tax on materials = $21. TOTAL = $1,424.
All rates shown are examples. Enter your own; prices, markup and tax rate are remembered on this device. This is a planning estimate only. It does not include anything not entered above, such as permits, inspections, engineering, site preparation, demolition or disposal (unless entered), access or equipment problems, regional surcharges, contingency or price changes. Get written quotes before committing.
Frequently asked questions
What hourly rate should I charge?
Start from what you pay per hour (wage plus payroll taxes, workers’ comp and benefits), add your share of overhead (vehicle, insurance, tools, office) per billable hour, then add profit. Billable hours are fewer than paid hours, so the rate is usually well above the wage.
Is markup the same as margin?
No. A 20% markup on cost gives a 16.7% margin on price (20 ÷ 120). Use a markup calculator to convert between them.
Should I charge sales tax on labor?
It depends on the state and the kind of work. Many states tax materials but not installation labor; some tax certain services. Choose “Materials only” or “Whole subtotal” to match your state’s rules.
How do I account for travel?
Either charge a flat trip fee (as here) or bill drive time at your hourly rate plus mileage. A mileage cost calculator can help you set the per-trip figure.
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Sources
- Construction Laborers and Helpers: Pay (Occupational Outlook Handbook) — U.S. Bureau of Labor Statistics
- Carpenters: Pay (Occupational Outlook Handbook) — U.S. Bureau of Labor Statistics
- Occupational Employment and Wage Statistics (OEWS) — U.S. Bureau of Labor Statistics
Formulas are taken from the free public references above. Results are provided “as is” for informational and educational purposes only. See our disclaimer.
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