Pricing & Gross Margin

Pricing in field services has to cover more than labor and materials. It must cover labor burden, travel time, dispatch, callbacks, equipment, fleet, insurance, overhead, taxes, and target profit.

Pricing inputs

Input	Why It Matters
Direct Labor	Technician or crew wage cost.
Labor Burden	Payroll taxes, benefits, workers comp, insurance, and related costs.
Materials	Parts, supplies, inventory, disposal, permits, and job-specific materials.
Travel Time	Unbilled drive time that consumes technician capacity.
Truck Cost	Fuel, maintenance, insurance, lease/payment, and depreciation.
Callback Allowance	Expected rework and warranty leakage.
Overhead Allocation	Dispatch, office, management, rent, software, marketing, and admin.
Target Profit	Owner return and reinvestment capacity.

Simple pricing formula

Direct Labor
+ Labor Burden
+ Materials
+ Truck / Equipment Cost
+ Travel Time Cost
+ Callback Allowance
+ Overhead Allocation
+ Target Profit
= Required Price

Pricing red flags

Gross margin varies wildly by job type.
Technicians are busy but gross profit is flat.
Small jobs consume too much dispatch and travel time.
Materials are marked up inconsistently.
Callbacks are treated as operations issues, not margin leakage.
Competitor pricing drives decisions more than cost structure.

Price from cost and margin, not guesswork.

Use the pricing and margin calculator to understand your required job price before work is sold.

Open pricing calculator

By Heather Engler, Esq.

Founder & Principal, Capital Advisors

Heather blends legal training with deep expertise in bookkeeping and tax compliance, giving her a unique perspective on financial strategy, risk management, and operations. Under her leadership, Capital Advisors serves hundreds of clients across bookkeeping, tax, payroll, and financial advisory. More about the team →