Guide
How labor, materials, overhead, and margin combine into a price that actually protects your business — plus a calculator to run your own numbers.
Calculation methods, rounding, and example data
Labor cost should reflect your fully loaded rate per person-hour — wages plus payroll tax, workers' comp, and benefits — not just take-home pay. You can calculate labor two ways: directly (crew size × hours × loaded rate), or from a production rate (quantity of work ÷ units per person-hour). Production rates are more powerful once you have a few completed jobs to base them on, because they scale automatically with project size.
Use what your supplier actually charges you, not a list price — including any delivery or handling fees rolled into the unit cost. Track materials in the units you actually order in (yards, tons, each, linear feet) so quantities transfer cleanly from a takeoff to a price.
Overhead is the cost of running your business that isn't tied to any one job — insurance, vehicle payments, office and admin time, tools that aren't billed per job, and similar fixed costs. Most contractors express it as a percentage of direct job cost and add it to every estimate so it's never silently absorbed by thinner margins.
Markup is profit divided by cost. Margin is profit divided by selling price. They sound similar but produce different prices for the same target percentage — and the gap gets larger as the percentage grows.
35% markup
$2,849.70 true cost × 1.35 = $3,847.10
That price is only a 25.9% margin.
35% margin
$2,849.70 true cost ÷ 0.65 = $4,384.15
A true 35% margin, exactly.
Cost owned or rented equipment the way you actually pay for it — per hour, per day, or per job — and include it in direct cost the same as materials and labor. It's easy to under-price equipment-heavy work (grading, hardscape) by treating equipment as a rounding error instead of a real line item.
A flat minimum project price protects small jobs from losing money to fixed costs like a service call, setup time, or a delivery minimum. Check your minimum the same way you'd check any price: against the true cost of your smallest typical job at your target margin, not a round number picked years ago.
A production rate (units of work per person-hour) turns a quantity into a labor estimate without re-deriving crew hours from scratch every time. Your production rate is yours — it depends on your crew, your equipment, and the site conditions you typically work in, and it's worth revisiting once you have completed-job data to compare against your original assumption.
Build the crew input with the loaded labor cost calculator. Use the mulch calculator for bulk-versus-bag quantities and the topsoil calculator for volume and supplier-density weight comparisons.
Once the complete cost is known, compare the selling price with your target in the profit margin calculator. After completion, the job cost calculator separates material, labor, and equipment overruns so your next estimate can use better assumptions.
Use the calculator below to turn your own costs into a true cost and a required selling price.
Enter what this project actually costs your business.
Crew wages, taxes, and benefits — total for this job
Permits, disposal, subcontractors, etc.
Trucks, insurance, admin — as % of direct cost
The profit share of your selling price — not markup on cost
Required selling price
$4,384.15
Display price: $4,385
Gross profit
$1,535.30
Achieved margin
35.0%
Margin = profit ÷ price. That's different from markup (profit ÷ cost) — see the markup vs. margin guide.
Pro stores your labor rate, overhead, target margin, and service assemblies. Review those assumptions for each job, then record actual costs when the work is done.
This tool is free. See Pro pricing and license details.
Compare budget with actual job costs and see where profit changed.
Open Landscape Job Cost CalculatorProfit checkCheck margin versus markup and solve for your target selling price.
Open Landscape Profit Margin CalculatorCrew calculatorCalculate loaded wages, paid person-hours, and crew cost including travel.
Open Landscape Labor Cost CalculatorIt depends entirely on your fixed costs — insurance, vehicles, admin time, and similar expenses relative to your job volume. There's no single correct number; calculate your own from your actual annual overhead divided by your annual direct job costs, and revisit it periodically.
Price by margin if you want a specific, predictable profit share of your selling price. Pricing by markup alone tends to under-deliver on that goal, since markup is calculated against a smaller base (cost) than margin is (price).
Track actual time spent on a service across several real jobs, then divide the quantity completed by the person-hours it took. Landscape Estimate Pro's estimate-vs-actual and labor variance tracking is built specifically to help with this over time.
At least enough to cover the true cost (materials, labor, equipment, overhead) of your smallest typical job at your target margin — otherwise small jobs quietly lose money even though they look busy on the calendar.