How do I calculate the true cost per cleaning job including overhead?
Start with direct labor, but don’t stop at the hourly wage. If you pay a cleaner $16 per hour, your actual cost is significantly higher once you add employer-side payroll taxes (7.65% for FICA), federal and state unemployment taxes, and workers’ compensation insurance. Workers’ comp for cleaning services in Arizona typically runs 3 to 5 percent of payroll. All together, that burden adds 25 to 40 percent on top of base wages. Your $16 per hour employee really costs you $20 to $22 per hour before they even pick up a mop.
Drive time is the cost most owners overlook. If your crew spends 30 minutes traveling between jobs, you’re paying loaded labor for that time but billing nobody. A team that cleans six hours in an eight-hour shift only gives you six billable hours while you pay for eight. That gap has to be accounted for somewhere.
Supplies cost less per job than labor but they add up. Cleaning chemicals, trash bags, paper products, microfiber cloths, equipment wear and replacement. Track what you spend monthly on supplies and divide by your total number of jobs or billable hours. Even a few dollars per job matters when you’re running dozens of jobs a week.
Now add overhead. This includes general liability insurance, vehicle costs (fuel, maintenance, insurance, loan payments), marketing spend, admin time for scheduling and quoting and billing, phone plans, and software subscriptions. Total all of your monthly overhead and divide by your total monthly billable hours. That gives you an overhead cost per billable hour.
The formula looks like this. Loaded labor rate per hour plus supplies per hour plus overhead per hour equals your true cost per billable hour. Multiply by the hours a job takes and you have your true cost per job. Whatever you charge above that number is your actual profit margin.
Most cleaning business owners price jobs by looking at what they pay their crew and adding a little on top. When you run the real numbers, a job that looked like it had a 40 percent margin might actually be at 10 or 15 percent. Some jobs might be losing money entirely, especially ones with long drive times or high supply usage.
If you don’t have clean financial records to pull these numbers from, the whole calculation falls apart. You need to know exactly what you’re spending on insurance, vehicles, supplies, and labor each month. Working with Phoenix bookkeepers who understand service businesses can help you build reports that break down your actual cost per hour so you can price with confidence instead of guessing.
Run this calculation quarterly. Your costs change as wages increase, insurance renews, and fuel prices shift. What was profitable six months ago might not be today.
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