Enter the materials cost ($), the labor cost ($), and the desired margin (%) into the Service Price Calculator. The calculator will evaluate and display the Service Price. 

Service Price Formula

The following formula is used to calculate the Service Price. 

SP = (MC + L) / (1-DM/100)
  • Where SP is the Service Price ($)
  • MC is the materials cost ($) 
  • L is the labor cost ($) 
  • DM is the desired margin (%) 

To calculate a service price, add the material costs and labor costs, then divide by 1 minus the desired margin.

How to Calculate Service Price?

The following example problems outline how to calculate Service Price.

Example Problem #1

  1. First, determine the materials cost ($).
    1. The materials cost ($) is given as 250.
  2. Next, determine the labor cost ($).
    1. The labor cost ($) is calculated as: 250.
  3. Next, determine the desired margin (%).
    1. The desired margin (%) is found to be: 30.
  4. Finally, calculate the Service Price using the formula above: 

SP = (MC + L) / (1-DM/100)

Inserting the values from above yields: 

SP = (250 + 250) / (1-30/100) = 714.28 ($)

Example Problem #2

The variables needed for this problem are provided below:

materials cost ($) = 50

labor cost ($) = 50

desired margin (%) = 70

This example problem is a test of your knowledge on the subject. Use the calculator above to check your answer.