Labor rate: definition, example, and why it matters
Formula: (wage × (1 + burden%)) + (monthly overhead ÷ billable hrs) × (1 + profit%). For a $28/hr tech with 25% burden, $4k overhead, 140 billable hrs, 25% profit: ~$80/hr break-even, ~$100/hr billable.
- Short definition. The hourly rate billed for skilled labor — distinct from a tech's actual wage.
- Category. Labor rate is a trades term used by service businesses when billing customers.
- How Glo Invoice handles it. Glo Invoice builds labor rate into the invoice itself, so you don't track it on paper or in a spreadsheet.
Frequently asked questions
What does labor rate mean?
Formula: (wage × (1 + burden%)) + (monthly overhead ÷ billable hrs) × (1 + profit%). For a $28/hr tech with 25% burden, $4k overhead, 140 billable hrs, 25% profit: ~$80/hr break-even, ~$100/hr billable.
