Cost per chair hour.

Worked example

Overhead is $1,000 rent + $200 insurance + $100 software = $1,300 a month, plus $4,000 you want to take home: $5,300 x 12 = $63,600 a year. You work 40 hours x 48 weeks = 1,920 hours but bill 70% of them, 1,344 hours. Each billable hour must earn $47.32. A 90-minute service with $10 of supplies then costs $80.98 to deliver, and $101.23 with a 20% margin (price = cost / (1 - 0.20)).

How it works

Cost per billable hour = (overhead + pay) x 12 / billable hours. Billable hours = hours worked x weeks x the share billed to clients. Time spent on admin, cleaning and empty slots counts as unbilled, which is why utilization matters so much.

A service price to cover costs is (cost per hour x minutes / 60) + supplies. A price with profit divides that by (1 - margin), so a 20% margin means profit is 20% of the price, not 20% on top of cost.

The pay you enter is before income tax. Overhead does not include taxes on profit; see the income goal calculator for a tax set-aside.

Sources and basis (checked 2026-10-05): Arithmetic on your inputs only. No industry hourly rate is assumed.

Everything runs in your browser. Nothing you type is sent or stored.

FAQ

How do I work out an hourly rate for my chair?

Add monthly overhead and the pay you want, multiply by 12, and divide by billable hours per year. That gives the minimum each billable hour must earn.

Why is cost per billable hour higher than my hourly pay target?

Because overhead is spread over fewer billable hours than hours worked. At 70% utilization you earn nothing for 30% of your hours but still pay the full rent.

What is the difference between margin and markup?

Margin is profit as a share of price; markup is profit as a share of cost. This tool uses margin, so a 20% margin is a price 25% above cost.