LawnBiz Tools

Lawn Care Hourly Rate Calculator

The rate you charge is not the wage you pay. This builds it up from the four things it has to cover.

Rate to charge per hour —

Enter your numbers below.

What an hour costs you

Pre-filled with the worked example below. Change every field to your own numbers.

What you pay per person per hour. Pay yourself a real wage.
Employer taxes, workers comp, liability. 0 if solo and unincorporated.
People paid for that hour.
Blades, belts, oil and a reserve toward replacement.
From the overhead recovery calculator.
Share of revenue kept — not a markup.

These are your numbers, not market rates. This calculator works from the costs you enter. It does not tell you what your area pays — that varies by region, season and year, and any site quoting you a single national figure is guessing. Use this to find the price that covers your costs and target profit, then sanity-check it against what you can actually win locally.

The formula and a worked example Show the arithmetic 
Cost per hour = wage x (1 + payroll burden) x crew size
              + fuel gal/hr x fuel price
              + maintenance reserve
              + overhead per billable hour

Rate to charge = cost per hour / (1 - target margin)

Worked example

Wage $20, burden 15%, crew of 1
  Labour       20 x 1.15 x 1        = $23.00
Fuel  0.8 gal x $3.60               = $ 2.88
Maintenance reserve                 = $ 2.50
Overhead (from the other calculator)= $12.27
                                     -------
Cost per billable hour              = $40.65

Rate at 35% margin = 40.65 / 0.65   = $62.54/hr

Profit per hour    = 62.54 - 40.65  = $21.89

So a $20 wage needs roughly a $62.54 charge-out rate — a little over three times the wage — and even then the business keeps $21.89 of it. Anyone charging $35 an hour while paying themselves $20 is losing money on every hour worked, because overhead alone is $12.27 of the gap.

Common questions

What hourly rate should a lawn care business charge?

Whatever covers your wage, your equipment, your overhead and your target margin. That number is specific to your costs, and a national average would be wrong for almost everyone reading it.

What is universal is the structure: the rate you charge is not the wage you pay. If you pay yourself $20 an hour and charge $20 an hour, the business earns nothing, and the insurance and truck payment come out of your own pocket.

Why is my charge-out rate so much higher than the wage?

Because the wage is one of four things the rate has to cover. Payroll burden adds employer taxes and insurance on top of the wage; equipment consumes fuel and wears out; overhead runs whether you work or not; and the margin is what makes it a business rather than a job.

A rate that is only modestly above the wage almost always means overhead has been left out.

Is this the rate I quote customers?

Usually not directly — most residential customers want a flat price per visit, not an hourly rate. Use this to work out the rate, then multiply by the time a property takes to get the quote.

The hourly rate is the number you manage the business by; the flat price is the number the customer sees.

What about non-billable time?

It is already handled, provided you computed your overhead rate against BILLABLE hours. That is the mechanism by which quoting, admin and travel to the shop get paid for.

If you divided fixed costs by total hours worked instead, the overhead rate is too low and this calculation inherits that error.

Related tools

Sources