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How Much Do You Need to Charge? How Much Are You Really Making?

This calculator will determine your breakeven point on labor and MESO. It will also breakout your overhead by department. Of course, this will indicate your actual net profit for that department. When you enter your desired net profit, your retail price on labor and material markup will be determined.

Do not use commas or currency symbols. Example: Enter $250,000 as 250000.

Don't be intimidated by this calculator. It is very important. The information it offers is crucial to your management success. Please spend some time with it.

Step Please Fill Out The Next Eight Items Answer
1 Total Department Sales (I.E.: Service or Installation). Example: 350000
2 Total Company Overhead. Example: 300000
3 Total MESO Purchases for the Department (not Company). Example: 75000
4 Total Direct Labor Purchases for the Company (not Department). Example: 250000
5 Total Direct Labor Purchases for the Department (not Company). Example: 115000
6 Average Hourly Wage Paid to Department Technicians. Example: 20.00
7 Desired Net Profit Percentage for Labor Sales (25% recommended). Example: 25

8 Desired Net Profit Percentage for MESO Sales (10% recommended). Example: 10

Calculated Values

Total Direct Costs for Dept.:  % of Sales

Gross Profit for Department:  % of Sales

Calculated Overhead for the Department:
Net Profit for Department:  % of Sales
Breakeven Labor Rate (per hour):
Hourly Labor Rate to Produce Desired Net Profit. This Is What You Should Be Charging:
Average Breakeven Multiplier for MESO:

Average MESO Multiplier to Produce Desired Net Profit:

INSTRUCTIONS FOR USE
 All fields are required. It is best to use a full year (last twelve months) of financial data. Do not use a single month of financial data. Enter data in the fields according to the steps below. Be certain to read the Disclaimer. Click the Calculate button. Print the results if you wish. Do not use commas or currency symbols. Example: Enter $250,000 as 250000.

  • Step 1: What are your total sales for this department for the period? Not total company sales, just that department.

  • Step 2: The total overhead for your company. This is not the overhead for this department. The calculator will figure that.

  • Step 3: You need to enter the total amount of money paid for MESO (materials, equipment, sub-contractors, and other direct costs). Accuracy is important.  If you do not know the answer, do not guess. Please get this information.

  • Step 4: Total technician payroll for the company. You need to enter the total amount of money paid for Labor for the entire company (all departments). This is labor paid to people to perform billable work. Examples include service technicians, installers, and helpers. Accuracy is important. If you do not know the answer, do not guess. Please get this information.

  • Step 5: You need to enter the total amount of money paid for Labor in this department only (the department that you are calculating your selling price for). This is labor paid to people to perform billable work. Examples include service technicians, installers, and helpers. Accuracy is important. If you do not know the answer, do not guess. Please get this information.

  • Step 6: This is the average amount of money that you pay your technicians per hour. Do not consider overtime. Do not include payroll taxes, insurance etc. Those amounts should have already been included in your overhead (Step 2) or total direct labor costs (Step 4).

  • Step 7: How much do you wish to make on labor? You should have higher net profit requirements for labor than you do MESO. Labor is the most stressful, most difficult thing you provide. We generally recommend 25% for service, 15% for replacements, and 10% for commercial and new construction.

  • Step 8: How much do you wish to make on MESO? You should have lower net profit requirements for MESO than you do labor. MESO is much easier and more desirable to provide than Labor. What do you worry about more, your people or your inventory? We generally recommend 15% for service, 10% for replacements, and 5% for commercial and new construction.

Once you have completed all of the fields, double check your answers and click the Calculate button. For an explanation of what the answers mean, please see the Glossary of Terms below. Print the results if you wish. To try again, reenter information as needed and click the Calculate button. The 'Reset Fields' button clears all of the fields.

RELATED LINKS (more information)
Glossary of Terms Used
How the Calculator Works
Why Other Calculators Don't Work
Why is This Calculator Better
What Do I Charge if I Can't Complete All of The Fields
Where Can I Get More Financial Information?


This loan calculator is written in Java Script. In order to use it, you need Windows 95, 98, 2000, ME, XP or NT and a Java capable browser and the "Allow Java Scripting" option activated.

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