Pricing and profitability
How to Calculate Your True Cleaning Labor Cost
An hourly wage is not your labor cost. For employees, the real number is the wage plus the employer share of payroll taxes plus any other employer-specific burden, applied to every paid hour — including the paid hours that are not on a customer's invoice. For your own labor, assign a replacement value: what you would have to pay someone to do the work you are doing. Anything else understates the cost of every job you price.
August 2026
Key takeaways
- Employer FICA is 7.65% of wages — 6.2% Social Security plus 1.45% Medicare, per IRS Publication 15.
- Other burden (state unemployment, workers' compensation, benefits, payroll service) varies widely and must be your own number, not a placeholder.
- Load the cost onto paid hours, and count drive, setup, restocking and admin as paid hours.
- Owner labor gets a replacement value, or your pricing breaks the moment you hire.
- Effective cost per billable hour is higher than cost per paid hour, and billable is what you price against.
The employee side of the calculation
- Loaded hourly cost = wage × (1 + employer FICA rate + other employer burden rate).
- Employer FICA is 7.65% of wages: 6.2% Social Security and 1.45% Medicare (IRS Publication 15). Social Security has an annual wage base limit; Medicare does not.
- Other burden covers state unemployment insurance, workers' compensation, any benefits, and payroll processing. These vary by state, carrier, classification and claims history — there is no rate we can honestly supply for you.
- Illustrative: an $18 wage at 7.65% FICA plus a placeholder 5% other burden costs about $20.28 per paid hour. Replace the 5% with your actual figures before you price anything on it.
- Job cost = loaded hourly cost × paid hours on that job, including nonbillable paid time.
The owner side of the calculation
Owner hours are the most commonly mispriced input in a solo cleaning business. There are two defensible ways to value them, and both beat treating them as free.
- Replacement value: what it would cost to pay someone to do the same work, loaded the same way. This is the number to use when pricing jobs, because it survives your first hire.
- Opportunity value: what your hour is worth doing the highest-value thing available — quoting, sales, systems. Useful for deciding what to delegate, less useful for pricing a job.
- Whichever you use, apply it consistently across every job, or job comparisons stop meaning anything.
Billable versus paid hours
A cleaner paid for 40 hours a week who spends 30 on customer sites is not costing you a 40-hour wage spread over 40 billable hours — it is spread over 30.
- Utilization = billable hours ÷ paid hours.
- Effective cost per billable hour = loaded hourly cost ÷ utilization.
- Illustrative: $20.28 loaded at 75% utilization is about $27.04 per billable hour — a third more than the wage suggests.
- This is why routing and scheduling are margin decisions and not just logistics.
Where the placeholders must be replaced
Every calculator on this site ships with example values so the arithmetic is visible. The 7.65% employer FICA rate is fixed by statute and cited above. Everything else — your other burden rate, your utilization, your wage — is a placeholder until you replace it. Nothing here is payroll, tax or employment advice, and payroll obligations differ by state and by how a worker is classified.
What belongs in loaded labor cost
Illustrative structure. The rates in the third column are yours to supply.
| Component | Applies to | Where the number comes from |
|---|---|---|
| Base wage | Employees | Your payroll records |
| Employer FICA 7.65% | Employees | Statutory: 6.2% Social Security + 1.45% Medicare (IRS Pub 15) |
| State unemployment | Employees | Your state rate and experience rating — varies widely |
| Workers' compensation | Employees | Your carrier quote for the job classification |
| Benefits and payroll service | Employees | Your actual monthly cost ÷ paid hours |
| Replacement value | Owner hours | What you would pay someone to do the same work, loaded |
| Paid nonbillable time | Both | Drive, setup, restocking, admin — measured, not estimated once |
Free tool
Run your own numbers
The Job Profitability + Price Floor Calculator does this arithmetic on one job in about two minutes. It is free, needs no account, and runs entirely in your browser.
Open the job profitability calculatorFrequently asked questions
- What is the employer payroll tax rate in 2026?
- The employer share of FICA is 7.65% of wages: 6.2% for Social Security up to the annual wage base limit and 1.45% for Medicare with no limit, per IRS Publication 15. State unemployment and other employer costs are separate and vary.
- How much should I add on top of a wage?
- Add 7.65% for employer FICA plus your own other-burden rate. We use 5% as a visible placeholder in the calculators, but real rates differ by state, carrier and benefits, so replace it with your actual numbers.
- Should I count drive time as labor cost?
- If it is paid, yes. Paid drive time is a cost of that job even though the customer is not billed for it separately. Leaving it out is one of the most common reasons a route looks profitable and is not.
- What replacement value should I use for my own hours?
- Start with what you would have to pay a cleaner to do that work, loaded with employer burden. If hiring at $18 an hour would cost about $20 loaded, valuing your own cleaning hours near that is defensible and keeps pricing stable through your first hire.
- Does this change how I price a job?
- It usually raises the floor. Once nonbillable hours and burden are included, break-even prices move up, which is exactly the information you need before deciding whether a job or account is worth keeping.
Free tool
See what a wage really costs weekly
The first-hire calculator applies the same loaded-labor math to a full week of paid hours, including utilization and payroll reserve.
Open the first hire calculatorFree tools referenced here
Job Profitability + Price Floor Calculator
Enter one job and see contribution profit, fully loaded margin, break-even price and the price your own target margin requires.
Open Free toolCan I Afford to Hire My First Cleaner?
Model loaded payroll, productive capacity, owner hours freed, payroll reserve and break-even jobs.
OpenRelated guides
How much should a cleaning business charge?
There is no correct national cleaning price. Build yours from labor, owner replacement value, supplies, travel, payment fees, overhead and your own target margin.
Open GuideWhat determines your profit margin
Separate contribution profit from fully loaded profit, and see the drivers that actually move a cleaning business margin: owner labor, nonbillable time, overhead, fees, routing and scope creep.
Open GuideWhen to hire your first cleaner
Busy is not the same as financially ready. Model loaded payroll, utilization, new revenue versus owner replacement, reserve coverage and break-even jobs first.
OpenSources and references
- IRS Publication 15 (Circular E), Employer's Tax Guide — Employer share of Social Security (6.2%) and Medicare (1.45%), the 7.65% employer FICA rate used throughout these guides.
- Jobber job costing documentation — Job-level framing of revenue, labor, expenses and profit. Documentation context only.
These tools are decision support built on your own inputs. They are not legal, tax, payroll or employment advice.