How to price a service with labor hours, materials and travel
To price a service, add the real hours of whoever does the job, including travel time. Also add materials, vehicle cost and a share of fixed costs. Then divide the total by 1 minus taxes, commission, card fee and margin. For an installation with R$ 601 in cost, the minimum price comes to about R$ 960.
What does an hour of the person doing the job really cost?
It costs the person's full monthly expense, divided by the hours they actually spend on jobs. It is not the salary divided by contract hours.
An article from Comunidade Sebrae PR on service pricing warns: dividing the salary by 160 hours underestimates the real cost. The internal rate needs to include payroll charges, benefits, vacation, the 13th-month salary, tools and supervision.
And not every hour becomes billable work. Part of the month goes to waiting, training, buying materials and warranty callbacks.
The table uses example numbers from an air conditioning installer with 3 technicians.
| Item (example) | Amount | Calculation |
|---|---|---|
| Monthly cost of one technician, with payroll charges, benefits and tools | R$ 5,600 | — |
| Job hours per technician in the month, with travel | 140 h | Out of about 176 h in the month |
| Technician's hourly cost | R$ 40 | R$ 5,600 ÷ 140 h |
| Company fixed costs: rent, office, software, accountant | R$ 8,400 | — |
| Team job hours | 420 h | 3 technicians × 140 h |
| Fixed cost per hour | R$ 20 | R$ 8,400 ÷ 420 h |
| Cost of each job hour | R$ 60 | R$ 40 + R$ 20 |
If the company used only the R$ 3,000 salary divided by 220 hours, the hour would come to R$ 13.64. The quote would start at less than a quarter of the real cost of R$ 60.
How do you include travel and materials in the price?
Travel has two parts: the vehicle and the time of whoever is driving. Materials go in at purchase cost, with the waste that happens on the job.
- Vehicle. Calculate the cost per kilometer: fuel, maintenance, insurance, IPVA (vehicle tax) and wear, divided by the month's kilometers. In the example, R$ 1.50 per km.
- Travel time. A technician in traffic is being paid. That time counts as job hours.
- Materials. Use the price of the last purchase, not the old price list. Add the waste: leftover tubing, cable and tape that doesn't go back into inventory.
A common mistake is charging a fixed "service call" fee for any neighborhood. The nearby customer pays too much, and the distant customer causes a loss.
To keep the quote simple, use bands: up to 10 km, 10 to 25 km, over 25 km. And group visits in the same area on the same day. A route in order cuts travel without touching the price.
What is the formula to calculate the price of a service?
Price = direct cost ÷ (1 − sum of the percentages taken from the price). This is the divisor markup, the same method Comunidade Sebrae PR describes for the selling price.
Direct cost is what you spend to do the service. The percentages are what comes out of the price after the sale: taxes, commission, card fee and the margin you want.
The table calculates the price of a split air conditioner installation. The amounts are an example.
| Installation item (example) | Calculation | Amount |
|---|---|---|
| Hours at the customer's site | 3 h × R$ 60 | R$ 180 |
| Round-trip travel | 1 h × R$ 60 | R$ 60 |
| Vehicle | 18 km × R$ 1.50 | R$ 27 |
| Materials, with waste | Tubing, cable, bracket | R$ 310 |
| Inefficiency factor | 10% of hours | R$ 24 |
| Direct cost | — | R$ 601 |
| Taxes | 6% of the price | — |
| Technician's commission | 8% of the price | — |
| Card fee | 3% of the price | — |
| Desired margin | 20% of the price | — |
| Sum of the percentages | — | 37% |
| Minimum price | R$ 601 ÷ 0.63 | R$ 954, rounded to R$ 960 |
The 6% in taxes is the rate for the first bracket of Annex III of the Simples Nacional, up to R$ 180K in revenue over 12 months. Some activities fall under Annex V, depending on payroll. Confirm your rate with your accountant.
The inefficiency factor comes from the same Sebrae PR article: 10% to 15% for extra meetings and rework. Here, it also covers going back to fetch a part.
What happens when the price is the "market price"?
The service can lose money without anyone noticing. Many businesses copy the competitor's price and only discover the margin at the end of the year.
The same installation, at three example prices:
| Price charged (example) | Taxes, commission and card (17%) | Direct cost | Left over | Margin |
|---|---|---|---|---|
| R$ 700 | R$ 119 | R$ 601 | − R$ 20 | Loss |
| R$ 850 | R$ 144.50 | R$ 601 | R$ 104.50 | 12.3% |
| R$ 960 | R$ 163.20 | R$ 601 | R$ 195.80 | 20.4% |
The R$ 700 price looks competitive, but each installation takes R$ 20 out of the cash. With 30 installations in the month, that is R$ 600 in losses, before anything unexpected.
This does not mean the competitor's price doesn't matter. It means it needs to be compared with your cost. If the market pays R$ 850, the question becomes where to cut cost: travel, materials or idle hours.
Why does one service make a margin and another doesn't?
Because the weight of travel and hours changes from service to service. A short, cheap service suffers more from travel.
A split unit cleaning, in the same example:
| Cleaning (example) | Amount | Share of the price |
|---|---|---|
| Price | R$ 250 | 100% |
| Hours at the customer's site | R$ 75 | 30% |
| Travel: driving time and 22 km | R$ 73 | 29% |
| Product | R$ 30 | 12% |
| Taxes, commission and card | R$ 42.50 | 17% |
| Left over | R$ 29.50 | 12% |
Travel takes 29% of the price, almost as much as the work at the customer's site. There are three ways out, and they can be combined:
- group visits in the same area on the same day;
- charge travel by distance band, separately from the service;
- sell a bundle, for example cleaning every unit in the house in the same visit.
Do this math per service, with the month's real orders. The company average hides the service that pays the bills and the one that drains money.
What does the quote need to show the customer?
The quote needs to itemize what you added up. It is also a rule of the Consumer Protection Code.
Under art. 40 of the CDC, the prior quote shows the cost of labor, materials and equipment. It also shows the payment terms and the start and end dates. Unless otherwise agreed, it is valid for 10 days.
Once approved, the quote binds both parties and only changes through a new negotiation. That is why a calculation error falls on whoever quoted. And under art. 39, item VI, doing the work without a quote and express authorization is an abusive practice.
An itemized quote helps you sell. The customer sees why the installation costs R$ 960, and the conversation moves past "it's expensive". For what comes after the approved quote, read what a work order needs to include.
How CERNE solves it
CERNE gives you the cost of each service calculated on each order, with the month's margin by type of service.
- A quote that adds everything up. The hours of whoever does the job, materials and travel go into the quote, and the customer approves by link.
- Real cost on each order. Departure and arrival track the travel, materials used come off inventory, and the commission is included.
- Margin per service at month end. You see which service pays for the operation and which one drains money.
- Route of the day. Visits come out in order, with travel time, to group the same area.
- Direct question. In the AI assistant, you ask "which service had the lowest margin in October, and why?". The answer comes from the order data, and the price only changes with your approval.
The services package starts with an assessment of your business. It uses modules already running at CERNE clients: the schedule per professional, the board with owner and deadline, and approval by link. See the margin workflow on the services page and the cards for each function.
Start with the assessment
The tables in this text use example numbers. Your business's use your orders, your technicians and your vehicle. Start with an assessment of your operation: our team calculates the cost and margin of each service with you. Book the assessment.
Frequently asked questions
- How do you calculate the price of a service?
- Add the direct cost of the service: the hours of whoever does the job, including travel time, materials, vehicle cost and a share of fixed costs. Then divide by 1 minus the sum of the percentages taken from the price: taxes, commission, card fee and desired margin.
- How do you calculate the hourly cost of a technician or professional?
- Divide the person's full monthly cost, with payroll charges, benefits and tools, by the hours they actually spend on jobs in the month. Dividing the salary by 160 hours underestimates the real cost, according to an article from Comunidade Sebrae PR.
- How do you charge for travel in a service quote?
- Add the vehicle's cost per kilometer and the travel time of whoever does the job, which is paid time. To avoid errors in the quote, use distance bands or neighborhoods, and group visits in the same area on the same day.
- How much margin of error should you add to a service price?
- An article from Comunidade Sebrae PR suggests adding a 10% to 15% inefficiency factor on hours, to cover extra meetings and rework. Adjust it by history: compare quoted hours with actual hours on recent orders.
- Can a service quote change after it is approved?
- Only through a new negotiation. Under art. 40 of the Consumer Protection Code, an approved quote binds both parties. It must itemize labor, materials, payment terms and dates, and it is valid for 10 days if nothing else is agreed.
Sources
- Comunidade Sebrae PR, Como precificar serviços recorrentes sem queimar margem, accessed October 26, 2026
- Comunidade Sebrae PR, Preço de venda: como calcular, January 25, 2021
- Lei Complementar 123/2006, Simples Nacional, Annex III
- Código de Defesa do Consumidor, Law 8.078/1990