Landscaping Pricing Formula: The Man-Hour Math You're Probably Missing

You quoted a cleanup job at $60 an hour because that's what the guy down the street charges. You won the job, ran a three-man crew for six hours, and at the end of the day, the math didn't add up. You made money on paper. You lost it in reality. If your landscaping pricing formula only accounts for what you pay your crew, you're leaving thousands on the table every season.

The Real Cost of Getting Your Landscaping Pricing Formula Wrong

Here's what bad pricing actually looks like over a full season. Say you're undercharging by just $15 per man-hour. That doesn't sound like much. But if you're running a three-man crew, billing 6 hours a day, 5 days a week, that $15 gap turns into $1,350 a week. Over a 30-week season, you've left $40,500 on the table.

That's not a rounding error. That's your profit. For many operations, that gap can be the difference between a 5% net margin and a 15% net margin. And in an industry where net profit margins commonly fall between 5% and 15%, getting this wrong means you're basically working for free.

Many landscaping owners are caught in what I call "profitless prosperity." Revenue looks healthy. The trucks are running. The schedule is full. But at the end of the year, there's nothing left. If that sounds familiar, your man-hour formula is probably the problem.

Why Most Landscapers Get Their Pricing Wrong

The root cause is simple. Most of us learned to price jobs by copying someone else or by "feeling it out." You drive by the property, eyeball the square footage, and throw out a number that sounds competitive.

The problem is that the number you come up with usually only accounts for one thing: the wage you pay your guys. Maybe you tack on a little for gas and materials. But there's a long list of costs hiding behind every man-hour that never makes it into the estimate.

Here's what typically gets missed:

Labor burden. This is the silent killer. On top of the hourly wage, you're paying payroll taxes, workers compensation insurance, general liability insurance, and sometimes health benefits or paid time off. That burden adds roughly 20-30% on top of what you're paying your employees. A $20/hour guy doesn't cost you $20. He costs you $25-$28 before he picks up a single trimmer.

Overhead allocation. Your truck payment, fuel, insurance on the vehicle, equipment depreciation, shop rent, phone bill, software subscriptions, uniforms, marketing costs. All of that has to be covered by billable work. If you're not spreading those costs across your man-hours, you're eating them out of what you think is profit.

Unbillable time. This is the one that really hurts. Your crew gets paid from the moment they clock in at the shop. But you only get paid when they're on a client's property doing work. The gap between those two numbers - drive time, loading the trailer, gas station stops, equipment breakdowns in the field - can easily eat 30-35% of your total payroll hours. Industry estimates suggest top-performing operations get their billable efficiency up to 85-90%, while the average company sits around 65-70%.

If you've ever felt like you're broke despite being fully booked, this is usually why.

How to Price Landscaping Jobs: Build Your Real Man-Hour Rate

Let me walk you through the actual formula. Grab a calculator and your last few bank statements.

Calculate Your True Labor Cost Per Hour

Start with the base wage. Then add the burden.

Base hourly wage: $20.00 FICA (Social Security + Medicare): approximately $1.53 (7.65%) FUTA/SUTA (federal and state unemployment taxes): approximately $0.40-$0.80 per hour (varies by state) Workers comp insurance: approximately $2.00-$4.00 per hour (varies by state and claims history) General liability portion: approximately $0.50-$1.50 per hour

Total loaded labor cost: roughly $25-$28 per hour

That's what one employee actually costs you per hour. Not $20. Check your state and local regulations because workers comp rates, unemployment tax rates, and payroll tax obligations vary significantly by jurisdiction. The U.S. Small Business Administration has a good breakdown of employer tax obligations if you want the specifics.

Determine Your Overhead Cost Per Man-Hour

Add up your monthly overhead. Everything that isn't direct labor or materials:

Truck payments and insurance: $1,800/month Fuel: $1,200/month Equipment payments and maintenance: $800/month Shop or yard rent: $1,000/month Phone, software, office supplies: $400/month Marketing: $500/month Your salary (yes, pay yourself): $5,000/month

Total monthly overhead: $10,700

Now divide that by your total billable man-hours per month. If you run a three-man crew, billing about 6 productive hours per day, 22 working days a month:

3 crew members x 6 billable hours x 22 days = 396 billable man-hours per month

$10,700 / 396 = $27.02 overhead cost per man-hour

Add Materials and Profit Margin

For maintenance work, materials might be minimal. For project work like mulching or planting, you need to add your material cost plus a markup. Make sure you're not confusing markup with margin when you calculate that number.

Now add your profit margin. If you want a 15% net margin (which would put you at the top end of the industry range), you need to build that in on top of everything else.

The Complete Landscaping Price Per Man Hour Formula

Here's how it comes together:

(Loaded Labor Cost + Overhead Per Man-Hour + Materials) / (1 - Target Profit Margin) = Your Charge Rate

Using our numbers for a maintenance visit with no materials:

($26.50 + $27.02 + $0) / (1 - 0.15) = $53.52 / 0.85 = $62.96 per man-hour

That's your break-even-plus-profit rate for one crew member doing maintenance work with the overhead numbers above.

Now here's the kicker. If you're charging $50 per man-hour because that's what feels competitive, you're losing about $13 on every single hour your crew works. Go back to the math at the top of this post. That adds up fast.

Validate Your Rate Against the Market

Landscaping maintenance labor commonly falls in the range of $50-$85 per man-hour in many markets. If your formula spits out a number in that range, you're in a healthy spot. If it comes out above $85, look at your overhead. Something might be bloated. If it comes out below $50, you either have very low costs (unlikely) or you're missing line items.

For specialized work like hardscaping, tree removal, or irrigation, rates should be significantly higher because the skill, risk, and equipment costs are all greater.

Where the Profit Really Leaks

Even with a solid formula, there are two places your man-hour rate falls apart in the real world.

The Unbillable Time Problem

Remember that 65-70% efficiency number? Here's what it means in dollars.

You pay your three-man crew for 8 hours each. That's 24 payroll hours. But if they only produce 6 billable hours each (18 total), you're paying for 6 hours of non-revenue work per day. At a loaded labor cost of $26.50 per hour, that's $159 per day in labor you can't bill. Over a month, that's $3,498 going straight to drive time, loading, and other non-productive activities.

This is why tight route density can add extra jobs per day. Every extra 15 minutes of drive time between jobs is money you burn with zero return.

The Estimating Guesswork Problem

Many landscaping owners estimate by eyeballing. You drive out to the property (unbillable time), walk the yard, and throw out a number based on gut feel. Sometimes you win the job and make money. Sometimes you win the job and lose money. You might not know which one happened until months later, if you find out at all.

The fix is straightforward but requires discipline. Time your crews. Track how long specific tasks actually take on specific property sizes. After 20-30 jobs, you'll have real data. Let's say a half-acre maintenance visit takes your crew around 45 minutes on average. Now you know exactly how to price it. No more guessing.

Building a Pricing Sheet That Works

Here's a practical approach you can implement this week:

1. List your top 10 service types. Mowing, edging, blowing, mulching, spring cleanup, fall cleanup, hedge trimming, etc.

2. Track actual time for 2-4 weeks. Have your crew leader note start and finish times for each task on each property. A simple text message to you at each stop works.

3. Calculate your average time per service type by property size. You'll start to see patterns. For example, you might find quarter-acre lots take around 35 minutes for a mow-edge-blow and half-acre lots take around 55 minutes. Your numbers will vary based on terrain, obstacles, and equipment.

4. Apply your man-hour rate to those times. If your rate is $63 per man-hour and a three-man crew spends 45 minutes on a property, that job costs you: 3 men x 0.75 hours x $63 = $141.75 minimum.

5. Build your pricing tiers. Now you have a pricing sheet based on real numbers, not feelings. You can hand this to anyone in your company, and they can quote accurately.

The principle is the same across every trade: know your real costs, then price above them with intention.

A Better Way to Maintain the Formula

Here's where I'll be honest with you. Building this formula is the easy part. Maintaining it across 80 or 150 clients, adjusting for seasonal changes, updating when your insurance renews, recalculating when you give a crew member a raise - that's where it gets heavy.

If you're still running your operation off a whiteboard or a notebook, every price adjustment means manually re-quoting jobs. You've probably seen how that kind of administrative friction creates a ceiling on your growth. The formula is only as good as your ability to keep it current.

This is where automation earns its keep. Not flashy technology for the sake of technology, but practical tools that keep your pricing formula updated in real time. Say your workers comp rate goes up 8% at renewal - your man-hour rate should automatically adjust across every estimate and proposal. When fuel prices spike, your overhead calculation should shift without you spending a Sunday redoing spreadsheets.

AI-driven pricing tools can pull in your actual job times, compare them against your estimates, and flag the jobs where you're consistently undercharging. They can also spot the patterns you'd miss - for example, you might discover that Tuesday crews run 12% less efficient than Thursday crews because of the route layout.

The Bureau of Labor Statistics occupational outlook for grounds maintenance workers projects continued demand in this industry. The landscaping businesses that survive and grow will be the ones that know their numbers cold. Not the ones that work the hardest.

The Bottom Line

Your man-hour rate isn't what you charge. It's what you need to charge to cover every real cost and still make a profit worth the 50-60 hour weeks you put in. Many landscapers are missing $10-$20 per man-hour because they forget the labor burden, skip the overhead allocation, or ignore unbillable time.

Run the formula with your actual numbers this week. If the result scares you - if it's higher than what you've been charging - that's good. It means you found the leak. And now you know what to fix. If you need help raising your rates without losing clients, there's a proven approach for that too.

If you want help building a pricing system that updates itself and flags the jobs bleeding you dry, let's talk. No pitch, just a conversation about your numbers.