How to Calculate Your True Billable Hourly Rate (Free Contractor Training)

What's Covered in This Training

TNFR co-founder Matt Koop walks through the real math behind profitable service pricing — the numbers most contractors never run and why that gap is costing them on every job.

• Why the hourly wage you pay your tech is never the real cost of a service call
• How to calculate your true billable hourly rate using your actual numbers
• The productivity reality most contractors overlook — and how it's quietly shrinking margins
• Why a single flat price loses jobs, and what to present instead
• How to build a rate that holds up even on a bad day

Why Does a $40/Hour Tech Actually Cost $125 to $160 an Hour?

A technician's true cost goes well beyond their hourly wage. Payroll taxes, benefits (medical, dental, 401k), and realistic productivity all change the math significantly. Most techs are billable for 16 to 17 days a month — not every working day — and that gap has to be covered somewhere. Factor in what it actually costs to attract and retain a skilled technician in today's labor market, and a $40/hour employee routinely costs $125 to $160 per hour to put in front of a customer. Price below that number, and every job you run is subsidized out of your own pocket.

How Do You Calculate Your True Billable Hourly Rate?

Your true billable hourly rate is built from four inputs: the full compensation cost to attract and keep a quality technician (not just today's wage), your total tax and benefits burden, actual technician productivity rather than an ideal 8-hour day, and a profit margin that can absorb a bad job without wiping out the week. Most service businesses are missing at least one of these in their pricing — which is why so many contractors stay busy and still struggle to build cash. The formula is straightforward once you run it with real numbers.

Why Do Menu Pricing Options Work Better Than a Single Price?

When a customer receives one flat price, their instinct is to compare — should they call someone else, wait, or push back? Presenting multiple options shifts that dynamic. Instead of deciding whether to buy, the customer is deciding which option fits them. The lowest tier removes sticker shock; the mid and upper tiers give customers a clear reason to spend more on their own terms. Contractors who move to menu pricing consistently see average ticket values rise without any additional sales pressure, because the structure of the presentation does the work.

Ready to Run Your Own Numbers?

The calculation Matt walks through in this training applies directly to your business — your wages, your benefits, your techs' actual productivity. Watch the full training above to see the formula, then reach out to the TNFR team to see how menu pricing builds this math into every job automatically.