Business calculator
Free Service Pricing Calculator
Build a service or job selling price from costs and a desired profit margin.
Service Pricing Calculator
Service pricing guidance
Build a selling price from cost and desired margin
This calculator uses margin-based pricing: it adds labor, direct materials, and allocated overhead, then solves for the selling price that leaves your desired profit margin.
Total service cost
Labor plus materials or direct costs plus allocated overhead.
Margin-based price
Total cost divided by one minus the desired margin.
Profit amount
Selling price minus total service cost.
Margin is not markup
Margin uses selling price as the base; markup uses cost.
How to use this calculator
Start with the full cost of delivering one job
- 1
Add labor
Use the labor cost allocated to the service or job.
- 2
Include direct cost and overhead
Add materials and a reasonable share of operating overhead.
- 3
Set desired margin
Choose the percentage of selling price you want to remain as gross profit.
Cost versus selling price
Cost is what it takes to deliver the service. Selling price is what the customer pays. A service price needs to cover cost and leave the desired profit amount after cost.
Why desired margin changes the price
A 30% desired margin means profit should be 30% of the selling price. That requires dividing cost by 70%, not multiplying cost by 1.30.
Margin versus markup
Markup adds a percentage to cost. Margin measures profit as a percentage of selling price. They are related but not interchangeable, which is why this calculator uses the margin formula explicitly.
Example: 30% margin
Labor: $200 Materials: $100 Overhead: $50 Total cost: $350 Desired margin: 30% Suggested price: $350 ÷ 0.70 = $500 Profit: $150 Resulting margin: 30%
Common mistakes to avoid
- Using cost × (1 + margin) when a target margin is required.
- Leaving overhead out because it is not tied to one invoice.
- Calling markup and margin the same measure.
- Setting a margin at or above 100%.
Frequently asked questions
Practical questions people ask about this tool
How is the suggested selling price calculated?
Suggested selling price equals total service cost divided by 1 minus the desired margin as a decimal.
What is the difference between margin and markup?
Margin measures profit against selling price. Markup measures the addition against cost.
Why must margin be below 100%?
A 100% margin would require dividing by zero, so no finite selling price can satisfy it.
Should overhead be included?
Yes. Include a reasonable allocation of overhead if the goal is a price that supports the broader business.
Related tools
Compare service pricing with adjacent tools
Profit Margin Calculator
Review the margin behind a price.
Markup Calculator
Compare cost-plus markup pricing.
Freelance Project Pricing Calculator
Estimate project pricing from hours and expenses.
Break-Even Calculator
Connect pricing with the sales level needed to cover costs.
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