Use this free contractor crew day-rate calculator to estimate your daily crew cost, break-even revenue, target daily revenue and crew day-rate. Whether you run a landscaping company, construction business, electrical company, plumbing company, HVAC business, painting company, roofing company, remodeling company or another contracting business, knowing what your crew needs to produce each day can help you price work more intelligently.

Enter your company numbers below to calculate the revenue your crew should generate to cover its costs and reach your desired profit margin.

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Free Contractor Crew Day-Rate Calculator

What Is a Crew Day-Rate?

A crew day-rate is the amount of revenue a contracting business needs to generate from a crew for one working day.

It is not simply the combined hourly wages of the employees on that crew.

A realistic crew day-rate may need to account for:

• Effective employee labor costs
• Trucks
• Equipment
• Fuel
• Company overhead
• Desired profit margin

Understanding these costs helps answer a much more useful question than:

“What do my guys make per hour?”

It helps answer:

“How much revenue does this crew need to produce each working day?”

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Why Contractors Should Know Their Daily Crew Cost

Many contractors estimate projects by looking at materials, guessing how many days the job will take and adding what feels like a reasonable amount for labor.

That approach can work when the numbers happen to line up.

It can also create jobs that keep a crew busy while producing very little profit.

A crew may have to generate thousands of dollars in revenue each day just to cover the actual cost of operating that crew and its share of the business.

Knowing your daily crew cost helps with:

• Estimating
• Job pricing
• Scheduling
• Crew productivity
• Production targets
• Hiring decisions
• Equipment decisions
• Gross margin planning
• Revenue goals

Instead of guessing whether a project is “big enough,” you can compare its selling price and expected duration against the amount your crew needs to produce.

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Crew Wages Are Not the Same as Crew Labor Cost

Suppose you have three employees who each earn $20 per hour.

At first glance, the labor cost may appear to be:

3 employees × $20 = $60 per hour

But that is only their base wage.

The company may also pay:

• Employer payroll taxes
• Workers’ compensation
• Paid holidays
• Paid vacation or PTO
• Overtime premiums
• Employee benefits
• Uniforms or other employee expenses

Once those costs are included, the total employee cost of the crew can be significantly higher than its combined wages.

That is why accurate crew pricing should start with realistic employee cost rather than base pay alone.

For this calculator, we recommend using your effective labor cost per productive hour. If you don’t know that number yet, use the Effective Labor Rate Calculator first.

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What Should Be Included in a Crew Day-Rate?

The exact costs vary between companies and trades, but a contractor may need to consider several categories.

Labor

Include the effective labor cost of the employees assigned to the crew.

Whenever possible, use effective labor cost per productive hour rather than base hourly wages.

Trucks and vehicles

A crew often depends on one or more vehicles to perform its work.

Vehicle costs may include payments, depreciation, insurance, repairs, maintenance and fuel.

Equipment

Include appropriate costs for equipment required to operate the crew.

Depending on your trade, this may include skid steers, excavators, trailers, mowers, compactors, lifts, generators, specialty tools or other production equipment.

Fuel and operating expenses

Fuel and other consumable operating expenses may materially affect the actual daily cost of a crew.

Business overhead

The crew also needs to contribute toward the broader cost of operating the company.

Overhead may include:

• Office salaries
• Rent
• Advertising
• Software
• Accounting
• General insurance
• Phones
• Administrative expenses
• Professional services
• Other fixed operating costs

Profit

Covering costs is not the goal of a for-profit business.

Your target crew revenue should also include enough margin for the company to generate the level of profit it needs.

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What Is Break-Even Crew Revenue?

Break-even revenue is the amount a crew needs to generate to cover the costs included in your calculation without producing a profit.

At break-even:

Revenue = Cost

If your crew costs the company $1,400 per day to operate, then $1,400 in daily revenue would simply cover those costs.

There would be nothing left as profit.

That is why break-even should generally be viewed as a minimum threshold rather than a pricing target.

A sustainable business needs revenue above break-even.

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How to Calculate a Target Crew Day-Rate

Once you know the crew’s daily cost, you can calculate the revenue required to achieve a target gross margin.

The formula is:

Target Revenue = Daily Crew Cost ÷ (1 − Desired Margin)

Suppose the crew costs your business:

$1,500 per day

And you want a:

35% margin

The calculation would be:

$1,500 ÷ (1 − 0.35)

$1,500 ÷ 0.65 = $2,307.69

That means the crew would need to generate approximately:

$2,308 per day

to produce a 35% margin on the costs included in the calculation.

This is very different from simply adding 35% to the crew cost.

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Margin vs. Markup in Crew Pricing

Margin and markup are not the same thing.

If a crew costs $1,500 per day and you simply add a 35% markup:

$1,500 × 1.35 = $2,025

The gross profit would be:

$525

But the margin would only be:

$525 ÷ $2,025 = 25.9%

So a 35% markup does not produce a 35% margin.

If your pricing goal is based on margin, use the margin formula rather than simply adding the same percentage to your cost.

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Why Daily Revenue Targets Matter

Contractors have limited production capacity.

A crew can only complete so much work in a day, week or year.

That means each crew-day has value.

Suppose your crew needs to generate $2,500 per day to meet your pricing target.

A project expected to take four crew-days needs to produce approximately:

4 × $2,500 = $10,000

in revenue before considering job-specific materials, subcontractors or other costs that may be priced separately.

If you sell that work for significantly less, the job may consume valuable production capacity without generating the return your company needs.

Daily production targets give contractors a simple benchmark for evaluating the relationship between:

Price + time + cost + profit

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Example: What Should a Three-Person Crew Produce Per Day?

Suppose a three-person crew has the following daily costs:

Effective labor cost: $800

Truck and fuel: $150

Equipment: $150

Allocated company overhead: $400

Total daily crew cost:

$1,500

If the company wants a 35% margin:

Target Revenue = $1,500 ÷ 0.65

Target daily revenue:

$2,307.69

Rounded, the crew should generate approximately:

$2,300 per working day

If the crew has an 8-hour productive day, that equates to approximately:

$288 per crew-hour

That does not necessarily mean every customer should literally be billed by the hour.

It simply gives the contractor a production benchmark for estimating and evaluating work.

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Should Materials Be Included in a Crew Day-Rate?

Not necessarily.

For many contractors, the crew day-rate is most useful as a measure of production capacity and operating cost, while materials and subcontractors are priced separately as job-specific costs.

For example, two projects may require the same crew for three days but have dramatically different material costs.

Keeping crew production cost separate from materials can make estimating easier to understand.

The important thing is consistency.

Use the same pricing method when comparing jobs so you know whether your crew is producing enough revenue relative to the time it spends on each project.

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Contractor Crew Day-Rate Calculator FAQs

What is a crew day-rate?

A crew day-rate is the amount of revenue a contractor targets for one crew working one day. It can be based on labor, vehicles, equipment, overhead and the profit margin the company wants to achieve.

How do I calculate my crew’s daily cost?

Add the daily effective labor cost of the employees on the crew plus appropriate vehicle, equipment, operating and overhead costs. Using effective labor cost per productive hour provides a more realistic result than using base wages alone.

Should overhead be included in a crew day-rate?

If you are using the crew day-rate as a pricing target, allocating an appropriate share of company overhead can help ensure your crews generate enough gross profit to support the entire business.

Should materials be included?

Materials are often better treated as job-specific costs rather than part of a standard crew day-rate. Contractors should use a method that matches how they estimate and track jobs.

Is crew day-rate the same as what I charge per day?

Not necessarily. The calculated day-rate is a financial benchmark. A contractor may still quote projects as lump-sum prices rather than presenting a daily rate to the customer.

What is break-even crew revenue?

Break-even crew revenue is the amount the crew must generate to cover the costs included in the calculation without producing profit.

How much should I add for profit?

There is no single profit margin that is right for every contractor. Required margins vary based on trade, overhead, risk, market conditions and business goals. The calculator allows you to use your own desired margin.

Can this calculator be used by different types of contractors?

Yes. This calculator can be used by construction, landscaping, hardscaping, concrete, electrical, plumbing, HVAC, roofing, painting, remodeling and other contracting and field-service businesses.