Overhead Recovery Calculator
Your fixed costs do not stop when you are not mowing. This works out what each billable hour has to carry so they actually get paid.
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
Fixed costs = insurance + vehicle + equipment finance
+ software + advertising + other
Overhead rate = fixed costs / BILLABLE hours
Billable hours are hours ON customer sites. Quoting,
driving to the shop, invoicing, repairs and chasing
payment are real, but nobody pays you for them - so
they must not appear in the denominator. Worked example
Monthly fixed costs
Insurance $ 180
Truck payment and running $ 550
Equipment finance $ 250
Phone, software, banking $ 90
Advertising $ 120
Licences, storage, accounting $ 160
-------
Total fixed $1,350
Billable hours in the month 110
Overhead rate = 1,350 / 110 = $12.27 per billable hour So a job with 45 minutes on site and 15 minutes of driving — one elapsed hour — must carry $12.27 before a cent of wages, fuel or profit. On a $35 lawn that is 35% of the price gone before the mower starts.
The seasonality trap. If you work eight months and pay insurance for twelve, a rate computed from a peak-season month leaves the winter uncovered. Switch the selector to annual figures and the season you actually work carries the whole year — the rate comes out higher, and that is correct.
Common questions
What counts as overhead?
Anything you pay whether or not you mow a single lawn. Insurance, truck payment and its insurance, phone, software, licences, storage or yard rent, accounting, advertising, and loan payments on equipment.
What is not overhead is anything that scales with the work itself — fuel, blades, and the wages of the hours you actually work. Those are variable costs and belong in the job cost, not here.
Why divide by billable hours instead of worked hours?
Because you cannot invoice for all the hours you work. Quoting, driving to the shop, invoicing, equipment repair and chasing payment are real hours that no customer pays for.
If you divide fixed costs by every hour you work, you compute a rate lower than reality and the shortfall comes out of your profit. Dividing by BILLABLE hours makes each invoiced hour carry the full load, which is the only way the fixed costs actually get paid.
How do I estimate billable hours?
Take the hours you expect to be on customer sites in a typical month. For most solo operators that is well under half of total working hours once quoting, travel, maintenance and admin are removed.
If you are unsure, start conservative — a lower billable-hours figure produces a higher overhead rate, which protects you. Then track actual on-site hours for a month and correct it.
Does seasonality change this?
Considerably, and it is the trap in this calculation. Fixed costs usually run all twelve months while billable hours may only exist for seven or eight in a cold climate.
If you compute the rate using a peak-season month, the winter months have nothing carrying them. The safer approach is to divide ANNUAL fixed costs by ANNUAL billable hours, so the season you actually work carries the whole year.
Related tools
- Lawn Care Hourly Rate CalculatorThe hourly rate you must charge to cover wages, equipment and overhead — and still profit.
- Lawn Care Break-Even CalculatorHow many lawns a month cover your fixed costs, and what happens if you raise your price.
- Lawn Mowing Price CalculatorWhat to charge for a lawn, worked from your own costs and your target profit margin.
Sources
- Fixed vs variable cost - Fixed costs do not vary with output; variable costs do. Overhead recovery spreads fixed costs across the units that generate revenue - here, billable hours. Standard cost accounting.
- Lawn Mowing Price Calculator - feed this rate straight into the job price