Your hourly billing rate should not be based only on technician wage. A sustainable low-voltage labor rate has to recover loaded labor cost, non-billable time, company overhead, tools, vehicles, callbacks, and profit.
Start with technician wage
Assume a technician earns $32 per hour. That is only the starting point.
Add labor burden
Labor burden may include employer payroll taxes, workers compensation, benefits, paid time off, training, uniforms, and other employment-related costs.
If you estimate labor burden at 30%, the loaded labor cost becomes:
$32 × 1.30 = $41.60 per hour
Account for utilization
A technician paid for 40 hours is not necessarily billable for 40 hours. Travel, meetings, warehouse time, training, estimating, callbacks, and administrative work reduce billable utilization.
If a technician costs the company $41.60 per paid hour but only 75% of paid hours are billable, the cost per billable hour is materially higher.
Company overhead still has to be paid
Loaded labor does not cover every business expense. Your pricing also needs to support overhead such as:
- Vehicles and fuel
- Insurance
- Office/admin labor
- Software
- Phones
- Tools and test equipment
- Warehouse/storage
- Marketing
- Licenses and professional fees
- Warranty and callback time
Markup versus gross margin
Do not confuse a labor markup with a gross-margin target. If your cost is $50 per billable hour and you add 50%, the selling rate is $75. Gross margin is only 33.3%.
To target a 40% gross margin on $50 of cost, the selling price is about $83.33.
Use more than one labor rate when necessary
Many contractors benefit from different rates for different work:
- Standard installation labor
- Senior technician / engineering support
- After-hours labor
- Emergency service
- Project management
- Travel time
The right structure depends on the business, but the rates should come from cost and utilization rather than guesswork.
Example
| Input | Example |
|---|---|
| Technician wage | $32/hr |
| Labor burden | 30% |
| Loaded labor | $41.60/hr |
| Billable utilization | 75% |
| Effective labor cost per billable hour | About $55.47/hr |
That is before company overhead and profit. A $60 billing rate would be far less profitable than it first appears.
Use job costing to verify your rate
The best labor rate is not the one that looks reasonable on paper. It is the one that produces acceptable results across real jobs.
Track estimated hours versus actual hours. If technicians consistently finish faster than estimated, you may have room to be more competitive. If labor regularly overruns estimates, identify whether the cause is pathway difficulty, poor surveys, scope creep, technician productivity, or unrealistic estimating assumptions.
The FieldOps Professional Low-Voltage Estimator adds loaded labor, material/labor markups, target-margin comparison, cable-box planning, and estimate-vs-actual job costing.
View the Professional Estimator — $79Frequently asked questions
Should travel time be billed?
It depends on your market and agreement. Even when travel is not shown as a separate line item, the cost still has to be recovered somewhere in pricing.
Should labor be marked up separately from materials?
It can be. Many contractors use different markup assumptions for labor and materials. The important check is the final gross margin on the project.
What is a good technician utilization target?
There is no universal number. Service-heavy businesses, project installers, and highly mobile field teams can have very different utilization. Measure your actual business rather than adopting someone else’s target.