3 Ways to Set Your Hourly Rate
Most crews use one of these three methods. Only one of them starts from your own costs:
| Method | Best For | Pros | Cons |
|---|---|---|---|
| Cost-Plus Formula | Accurate pricing based on your actual costs | Ensures profitability; adjusts as costs change | Requires tracking all expenses accurately |
| Market-Based | Quick competitive positioning | Easy to research; customers understand | Competitors may be undercharging |
| Revenue Target | Working backward from income goals | Ties rate to business goals | May not reflect true costs |
Worked Example: Calculating Your True Hourly Rate
Let's calculate the minimum hourly rate for a 2-person crew doing lawn maintenance:
Example: 2-Person Crew Hourly Rate
Per-worker rate: $77.28 ÷ 2 workers = $38.64/hr per person
Reality check: If you charge $50/hr for this crew, you'd lose $14.40/hr
Note: Labor burden varies by state. Workers comp for landscaping typically runs 3-8% of wages. All figures are US-based estimates.
If you run one crew and your rates already clear this formula, a spreadsheet handles the math fine and you do not need to buy anything. Software earns its keep when you quote every week and costs drift under you: this worksheet is exactly what landscape estimating software automates, applying your burden multiplier, overhead per billable hour, and target margin to every quote you price.
Now run your numbers
Same formula as the example above, seeded with the same values. Swap in your crew’s real costs — it updates as you type.
Your minimum crew rate
$77.28/hr
$38.64/hr per worker
Break-even = loaded labor + overhead. Minimum rate adds your profit margin on top, same as the worked example.
Does a real quote survive these rates?
Run one of your actual quotes through the free 60-second autopsy — your numbers above carry over automatically. No account.
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What's Included in Labor Burden?
One distinction before the list, because two different searches land here: what a landscaper makes per hour is the wage line ($18-20/hr for the crew in the example above). What a landscaping company charges per hour has to carry that wage plus everything below, plus overhead, plus margin. That gap is not padding; it is the rest of the business.
Labor burden is everything you pay on top of wages. For landscaping businesses, it typically includes:
- FICA (Social Security + Medicare): 7.65% employer share (IRS Topic 751: 6.2% Social Security + 1.45% Medicare)
- Federal unemployment (FUTA): 0.6% on first $7,000/worker after the state credit (IRS Topic 759)
- State unemployment (SUTA): 2-6% depending on your state and history
- Workers compensation: 3-8% for landscaping (higher-risk trade)
- General liability portion: Often calculated per $100 of payroll
- Benefits if offered: Health, retirement, PTO
Total burden typically adds 25-35% on top of base wages. A $20/hr worker actually costs you $25-27/hr.
What Landscapers Charge Per Hour by Service Type
For market context, here are typical billed ranges by service type in 2026. Your own formula result overrides any range on this list:
- Basic mowing/maintenance: $45-65/hr
- Planting and bed work: $50-70/hr
- Tree and shrub trimming: $55-80/hr
- Irrigation installation: $65-90/hr
- Hardscaping (patios, walls): $75-100+/hr
- Design and consultation: $75-150/hr
Note: Rates vary significantly by region. Metropolitan areas often command 30-50% higher rates than rural markets. Research local competitors.
5 Signs You're Undercharging
- Every customer says yes immediately: If no one ever pushes back on price, you're probably too cheap.
- Tight on cash despite being busy: Full schedule but can't make payroll? Your rate isn't covering costs.
- Haven't raised rates in 2+ years: Costs increase 3-5% annually. Your rate should too.
- Working more hours than planned: If jobs always take longer, your rate needs to compensate.
- Competitors charge significantly more: If you're the cheapest by far, you may be the only one losing money.
Fixing an undercharging problem starts at the quote, not the invoice. See how to price landscaping jobs without losing money for the five-step formula that builds each price from your costs up.