New Hire Break-Even
Before you put another name on the insurance: what that person has to bill to pay for themselves and still leave a margin.
- Loaded annual cost
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- Revenue they must produce
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- Per week
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A wage is not what a hire costs
A $60,000 tech does not cost $60,000. Payroll taxes, workers' compensation, liability insurance, benefits and paid time off typically add 20–40% on top. Then there is the truck, the fuel, the phone, the tools and the software seat. By the time they are productive you are often 45–50% above the wage.
And they do not bill every hour you pay for. A new hire ramping up may bill well under the 1,300 hours a seasoned tech manages, which is why the first year of a hire so often feels like running backwards.
Check this against your rate. If the required rate here is higher than what your true hourly rate calculator says you charge, the hire loses money at your current pricing. Fix the price first, then hire.
Worked example
- $60,000 wage + 28% burden = $76,800
- + $12,000 truck, phone and tools = $88,800 loaded cost
- At a 25% margin: $88,800 ÷ 0.75 = $118,400 of revenue
- Over 1,300 billable hours: $91.08/hr
- That is $2,277 a week, every week, all year
Common questions
- What if they only bill 900 hours in year one?
- Then the required rate climbs to about $132/hr, which almost certainly exceeds what you can charge. Run the number with a realistic first-year figure rather than a veteran's, and treat the shortfall as the real cost of training — budget for it instead of being surprised by it.
- Does this work for an apprentice?
- Yes, but apprentices often bill at a lower rate and against a senior tech's hours. Enter the hours actually invoiced under their name and the margin you expect from that work.
- Should I include a helper who never bills directly?
- No. A non-billable helper is overhead. Put their loaded cost into annual overhead on the true hourly rate calculator, where it raises everyone's rate.