How to Price a Service Call (Without Leaving Money on the Table)

Most tradespeople undercharge. Not because they don't know what they're worth, but because they've never sat down and calculated what a service call actually costs them. If you're still guessing at prices or copying whatever the guy down the street charges, you're almost certainly leaving money on the table.

Start with your true cost per hour

Your hourly rate isn't just what you want to take home. It's every cost your business incurs while you're on a job. Start by adding up:

Your salary or draw — what you need to pay yourself to live
Taxes and insurance — self-employment tax, liability insurance, workers' comp
Vehicle costs — gas, maintenance, insurance, loan payments
Tools and equipment — amortized over their useful life
Overhead — phone, software, licensing, office space, marketing

Divide that total by the number of billable hours you actually work in a year. Most tradespeople are surprised to find their true cost per hour is 40–60% higher than what they've been charging.

Don't forget drive time

A 45-minute job that requires a 30-minute drive each way is actually a 1 hour 45 minute commitment. If you're not accounting for travel, you're subsidizing every customer's convenience with your own margin. Some contractors build drive time into their service call fee. Others set minimum job sizes based on distance. Either way, track it and price for it.

Materials markup is not optional

You're not a charity parts warehouse. Standard materials markup in the trades runs 15–30% depending on the industry and item. This covers your time sourcing, picking up, and carrying materials, plus the risk of buying the wrong part or having leftover stock. If a customer complains about markup, remind them that the alternative is a separate trip charge plus their own time at the supply house.

Choose a markup strategy

Once you know your true costs, decide how you want to set final prices:

Cost-plus — add a fixed percentage (typically 30–50%) on top of your total costs. Simple and transparent.
Flat-rate — set fixed prices for common jobs based on historical data. Customers love the predictability, and you benefit when you get faster at the work.
Value-based — price based on the value to the customer, not your cost. Emergency calls, specialized skills, and jobs that prevent major damage all justify premium pricing.

Most successful contractors use a mix: flat-rate for common jobs and cost-plus for custom work.

Present pricing with confidence

The biggest pricing mistake isn't the number — it's the delivery. When you mumble a price or immediately offer a discount, you signal that you don't believe in your own value. Instead:

Present a written estimate, not a verbal number. It looks professional and gives the customer something to review.
Break down the line items so the customer sees exactly what they're paying for.
State the price clearly and then stop talking. Let the customer respond.
Never apologize for your pricing. You've calculated it based on real costs and fair margins.

Tools like FieldLedgr let you build and send professional estimates in minutes, right from the job site. You can save templates for common jobs so pricing stays consistent no matter who on your team is creating the estimate.

Review your prices regularly

Costs change. Gas prices go up, insurance premiums increase, and your experience makes you more valuable. Review your pricing at least once a year. If you haven't raised your rates in two years, you've effectively given yourself a pay cut.