Knowing the true cost of a truck roll is vital for every field service business—whether you run an HVAC company, security business, or AV integration firm. Pricing your services without accounting for hidden costs can kill your margins. And spoiler alert: it’s a lot more than gas and wages.
This guide breaks down what really goes into each service call, how to calculate your technician's actual hourly rate, and why understanding your labor utilization rate is critical to profitability.
Why Truck Roll Costs Are More Than Wages and Fuel
A recent LinkedIn post by a veteran HVAC contractor asked how a new work truck purchase would impact his cost of labor. Smart question—but it barely scratches the surface.
Field service companies need to consider:
- Payroll taxes
- Uniforms and training
- Vehicle payments, fuel, insurance, and maintenance
- Tools and equipment
- Overhead (SG&A expenses like rent, software, marketing)
Every minute your tech is on the clock but not billing a customer cuts into your margin. That’s where Labor Utilization Rate comes in.
The True Cost Breakdown of a Truck Roll
Here’s a sample breakdown from the HVAC contractor’s post. His technician earns $30/hour.
|
Cost Component |
Hourly Cost |
|
Base Wages |
$30.00 |
|
Payroll Burden (20%) |
$6.00 |
|
Uniforms/Training |
$0.48 |
|
Truck Payments |
$6.25 |
|
Fuel |
$1.12 |
|
Insurance |
$0.87 |
|
Maintenance |
$0.72 |
|
Tools & Equipment |
$0.48 |
|
SG&A Overhead Allocation |
$36.06 |
|
Total (Pre-Utilization) |
$81.97 |
At face value, the breakeven hourly labor cost is $81.97—but only if every paid hour is billed. And that almost never happens.
Understanding Labor Utilization Rate
Let’s be real: techs aren’t billing 8 hours a day. Time spent on training, loading trucks, driving to jobs, and taking PTO often goes unbilled. Most integrators report an average labor utilization rate of just 60%. That means out of an 8-hour day, only 4.8 hours are billable. So, what does that do to your costs?
$81.97 ÷ 0.60 = $136.61/hour
That’s your true breakeven hourly rate.
What About Profit?
You’re not in business just to break even. According to data from D-Tools Cloud, the average labor gross profit margin for integration firms is around 55%. So, to earn a 55% margin on that $136.61 breakeven rate:
$136.61 ÷ (1 - 0.55) = $211.83/hour
That’s the minimum you should be charging per hour for a tech making $30/hour if you want to hit that profit target.
Key Takeaways for Field Service Pros
- Truck roll cost = wages + payroll + vehicle + tools + overhead
- Most service companies underprice because they ignore utilization
- Labor utilization rate is the silent killer of service profit margins
- To price profitably, aim for 2.5 to 3x base wage in your hourly rate
Want to Track Costs Automatically?
Tools like D-Tools Cloud and D-Tools System Integrator (SI) help integrators and service companies automate labor costing, factor in SG&A expenses, and build profitable estimates with confidence.
Stop guessing. Start charging what your labor is worth.
