Plumbing Labor Rate Calculator — Wage to Bill Rate
The step almost everyone skips is dividing by billable hours rather than paid hours. A tech is paid 2,080 hours a year and sells far fewer, and that gap has to be recovered inside the hours you can actually invoice. Add payroll burden and overhead on top and a $38 wage needs a $123.22 bill rate — 3.24× the wage.
Work out your rate
Taxes, workers' comp, insurance, PTO. 25–40% typical.
Van, fuel, tools, software, office, advertising.
Of 2,080 paid. 1,560 is 75%.
Of the rate, not of cost — divided, not multiplied.
Bill this rate
At 75% utilisation you have to bill $123.22. Selling one more hour a day — 240 a year — would bring that down to $106.79.
Loaded cost
$73.93/h
Multiple of wage
3.24×
See the breakdown
Planning estimate. Overtime premiums, callback and warranty time, and bad debt are not modelled — all three push the required rate up. Replace the defaults with your own figures from last year's accounts.
The formula, explained in plain English
Four steps, and the third one is where most rates go wrong.
Billable, not paid
Dividing by 2,080 instead of 1,560 would give $55.45 of loaded cost instead of $73.93 — a 33% understatement that quietly turns profitable jobs into break-even ones.
Utilisation beats price
60% to 90% utilisation moves the required rate from $154.02 to $102.68. No price rise achieves a $51.34 swing, and no customer objects to it.
Overhead is per tech
Divide total company overhead by the number of billing technicians, not by headcount. Dispatchers and office staff are overhead; they do not carry a share of it themselves.
Margin is of the rate
Divide by (1 − margin), do not multiply by (1 + margin). At 40% the two differ enormously: $123.22 against $103.50. The second is only a 28.6% margin.
Worked examples
The defaults, the shop that only sells 60% of its hours, and what a raise really costs.
$38 wage, 75% utilisation
+ 32% burden $25,293 = $104,333
+ $11,000 overhead = $115,333
÷ 1,560 billable = $73.93 loaded
÷ 0.60 = $123.22 = 3.24× the wage
Result: $123.22. Note the loaded cost is already $73.93 — nearly double the wage — before a cent of profit.
The same tech at 60% utilisation
÷ 1,248 billable = $92.41 loaded
÷ 0.60 = $154.02
versus $123.22 at 75% → must charge $30.80 more
Result: nothing about the tech changed. Three hundred fewer sellable hours a year forces a $30.80 higher rate — and that shop then looks expensive against a competitor who simply schedules better.
What a $5 raise actually costs
bill rate $123.22 → $137.89
→ $14.67 per billed hour
every $1 of wage costs $2.93 of rate
Result: a $5 raise needs almost $14.67 more on the hour — because the raise carries burden, then gets spread over fewer hours than you pay for, then gets marked up for margin. Worth knowing before you promise one.
The utilisation sweep — the most useful table here
Same $38 wage, same burden, same overhead, same margin. Only the hours you manage to sell change. Computed from the same code the calculator runs.
| Billable hours | Utilisation | Loaded cost | Required bill rate |
|---|---|---|---|
| 1,248 | 60% | $92.41 | $154.02 |
| 1,352 | 65% | $85.31 | $142.18 |
| 1,456 | 70% | $79.21 | $132.02 |
| 1,560 | 75% | $73.93 | $123.22 |
| 1,664 | 80% | $69.31 | $115.52 |
| 1,768 | 85% | $65.23 | $108.72 |
| 1,872 | 90% | $61.61 | $102.68 |
Bill rate by wage
At 1,560 billable hours. Note the multiple falls as the wage rises — fixed overhead is a smaller share of a bigger number.
| Wage | Bill rate | Multiple |
|---|---|---|
| $28/h | $93.89 | 3.35× |
| $33/h | $108.55 | 3.29× |
| $38/h | $123.22 | 3.24× |
| $43/h | $137.89 | 3.21× |
| $48/h | $152.55 | 3.18× |
Sources & standards: this is business arithmetic, not code. The burden, overhead and utilisation defaults are typical for small US residential plumbing contractors and should be replaced with your own figures from last year's payroll and accounts. Overtime premiums, warranty and callback time, and bad debt are not modelled and all push the required rate up. Wage levels vary widely by region and licence level — check the US Bureau of Labor Statistics for current occupational data.
Frequently asked questions
Common questions about plumbing labor rates, burden, overhead, and billable utilisation.
What should I charge per hour as a plumber?
Whatever covers your loaded cost plus your margin — for the defaults here that is $123.22 an hour. A $38 wage becomes $79,040 a year, plus 32% burden and $11,000 of overhead, divided by 1,560 billable hours, then divided by 0.60 for a 40% margin. That is 3.24× the wage, which is a normal multiple and usually a shock the first time you see it.
Why is my bill rate three times the wage?
Three things stack. Payroll burden adds 32% before you have driven anywhere. Overhead — van, insurance, licensing, software, office — adds $11,000 per tech per year. And crucially you can only invoice about 75% of the hours you pay for, so the other 25% has to be recovered inside the ones you can. Multiply those together and 3× is arithmetic, not greed.
What is payroll burden and what should it be?
Everything you pay on top of the wage: employer payroll taxes, workers' compensation, health insurance, retirement contributions, paid time off, and training. For a US plumbing contractor 25% to 40% is typical, and workers' comp rates for plumbing push it toward the upper half. The default here is 32%.
What are billable hours and why do they matter so much?
The hours you can actually put on an invoice. A full-time tech is paid 2,080 hours a year, but drive time, the supply house, warranty callbacks, training, vacation and slow days take a large bite. 1,560 hours is 75% utilisation and is a realistic target for a well-run service outfit. This is the single strongest lever on the page — see the sweep table below.
Does raising utilisation beat raising the rate?
Almost always, and it is the insight most shops never act on. At the same $38 wage, moving from 60% to 90% utilisation takes the required bill rate from $154.02 to $102.68 — a $51.34 swing you can pass on as competitiveness or keep as profit. No price increase does that, and customers never object to it.
Should apprentices bill at a different rate?
Run this calculator separately for each person. An apprentice has a lower wage but a similar share of overhead and often lower utilisation, so their bill rate is not proportionally lower. Many shops bill one blended rate for simplicity, which is fine as long as the blend is weighted by the hours each person actually sells rather than by headcount.
Is this the same as what I quote the customer?
Not necessarily. This is the rate that makes an hour of labour profitable. Many plumbing companies bill flat-rate by task rather than hourly — but flat-rate pricing is built from an hourly rate like this one multiplied by a task time. Either way, this is the number underneath it. Feed it into the Plumbing Estimate Calculator to price a whole job.
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