Labor Rate Calculator

1. Enter your base painter wage. This is the hourly rate you pay a painter before any extras. If you pay different rates for lead painters and helpers, use the average across your crew.

2. Set the burden rate. This covers everything on top of wages: employer payroll taxes, workers comp, health insurance, retirement match, uniforms, and training. Most painting companies land between 25-35%. Workers comp for painters tends to be higher due to ladder and chemical exposure.

3. Input PTO hours per year. Count vacation, sick days, holidays, and training days. Three weeks (120 hours) is common for painting crews. Some seasonal painting companies adjust this for weather-related downtime.

4. Set your utilization rate. This is the percentage of available hours your painters actually spend on billable work. Painting crews typically see 65-80% utilization since jobs run full days. Solo painters doing their own estimates may be lower at 50-65%.

5. Enter your team size and overhead. Annual overhead includes vehicle costs, insurance, ladder and equipment maintenance, paint supplies, marketing, office costs, and everything that is not direct labor or materials for a specific job.

6. Choose your profit margin. This is the net margin you want after covering all costs. 15-25% is the target range for healthy painting businesses. Higher margins are possible on specialty work like cabinet refinishing or faux finishes.

This calculator uses a bottom-up cost method that builds your rate from actual expenses. It makes sure every dollar of cost is covered before you add profit.

Step 1 -- Loaded Wage. Take the base wage and add the burden rate. A $22/hr painter with 30% burden actually costs you $28.60/hr when you factor in taxes, insurance, and benefits.

Step 2 -- Available Hours. Start with 2,080 annual work hours (40 hrs/week x 52 weeks) and subtract PTO. This gives you the hours a painter is actually working.

Step 3 -- Billable Hours. Multiply available hours by the utilization rate. This is the number of hours you can actually charge customers for. Time spent on estimates, travel between jobs, and cleanup eats into billable hours.

Step 4 -- Overhead Per Hour. Divide total annual overhead by all painters' combined billable hours. This tells you how much overhead each billable hour needs to carry.

Step 5 -- Break-Even Rate. Add the loaded wage and the overhead per hour. This is the minimum you must charge to not lose money -- zero profit.

Step 6 -- Billable Rate. Divide the break-even rate by (1 minus your profit margin). A 20% margin means dividing by 0.80. This is the rate you actually charge customers.

Pricing painting jobs. Whether you quote by the hour or by the room, you need to know your true hourly cost. This calculator gives you the floor rate so you never accidentally underbid a job.

Annual rate review. Paint prices, insurance premiums, and wages change every year. Run this calculator every January with updated numbers to make sure your pricing keeps up with your costs.

Hiring decisions. Before adding a painter, plug in the new crew size and see how it changes your overhead per hour. More painters spread overhead thinner, but only if you have enough jobs to keep them busy.