Cleaning & janitorial
Janitorial Contract Pricing Calculator
Price a contract across its term with escalation and periodic work built in.
Result
Overhead and margin are taken as shares of the selling price, which is why the cost is divided rather than multiplied. Adding 15% to cost does not produce a 15% margin. Gross profit is what is left after the cost of doing the job. Overhead comes out of that: the building, the office wages, the vans, insurance, software and advertising. A healthy gross margin still loses money if overhead is larger.
Get a Free Business AuditWhat moves the number
- Annual hours across all frequencies and periodic tasks.
- Wage escalation across the contract term, which on a multi-year deal is significant.
- Consumables and equipment allocated across the term.
Where this one goes wrong
Fixing a price for a multi-year term without an escalation mechanism. Wages rise every year, and a contract priced at year one costs with no uplift is losing margin from the first anniversary.
Questions
About this calculator
Should contracts include an escalation clause?
On anything beyond a year, yes. Wage costs rise and a fixed price silently erodes margin. It is far easier to agree at the outset than to renegotiate later.
How should periodic work be priced?
As a separately scheduled and priced item. It makes the daily rate honest and gives the customer something to flex if their budget changes.
What contract length is best?
Long enough to recover mobilisation, short enough to correct a mispriced bid. That trade-off is what makes the mobilisation figure worth calculating.
The formula
price = direct cost / (1 - overhead% - margin%)
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How to use this calculator
- Labour cost ($). Burdened: wages plus tax, insurance and the vehicle, not the hourly wage.
- Materials cost ($). Enter your own figure; the page starts at $12.
- Other direct costs ($). Permits, disposal, equipment hire, subcontractors.
- Overhead rate (%). Overhead as a share of revenue. Work it out from last year's accounts.
- Target net margin (%). Enter your own figure; the page starts at 15%.
The result updates as you type, so you can try a figure, see what it does to price to quote, and change it back. Nothing you enter is sent anywhere or saved.
A worked example
These are the figures the calculator opens with. Every number in the results column below is produced by the same calculation the page runs, so you can follow it through before putting your own figures in.
What goes in
| Input | Value |
|---|---|
| Labour cost | $96 |
| Materials cost | $12 |
| Other direct costs | $0 |
| Overhead rate | 22% |
| Target net margin | 15% |
What comes out
| Result | Value |
|---|---|
| Price to quote main result | $171.43 |
| Direct cost | $108 |
| Overhead recovered | $37.71 |
| Net profit | $25.71 |
| Gross margin | 37.0% |
| Markup on direct cost | 58.7% |
Quote $171.43 to cover $108 of direct cost, recover $37.71 of overhead and leave $25.71 of net profit. That is a 58.7% markup on cost.
How sensitive the answer is
Holding everything else steady and changing only labour cost, this is what happens to price to quote. It is worth knowing which of your inputs the answer actually hinges on, and which barely move it.
| Labour cost ($) | Price to quote |
|---|---|
| $48 | $95.24 |
| $72 | $133.33 |
| $96 example above | $171.43 |
| $144 | $247.62 |
| $192 | $323.81 |
Every other input is held at the example value while this one changes, which is not how a real job behaves. Treat it as a guide to which number matters most, not as five separate quotes.
What each figure means
- Labour cost ($)
- Burdened: wages plus tax, insurance and the vehicle, not the hourly wage.
- Materials cost ($)
- A money amount, starting at $12.
- Other direct costs ($)
- Permits, disposal, equipment hire, subcontractors.
- Overhead rate (%)
- Overhead as a share of revenue. Work it out from last year's accounts.
- Target net margin (%)
- A percentage, between 0 and 80, starting at 15%.
What the results tell you
| Result | What it is |
|---|---|
| Price to quote | The headline result. A money figure. |
| Direct cost | A money figure. |
| Overhead recovered | A money figure. |
| Net profit | A money figure. |
| Gross margin | A percentage. |
| Markup on direct cost | A percentage. |
Time is the variable that bites
Pricing that works out on paper fails when the job takes longer than quoted. First cleans, heavily soiled sites and access problems all run over, so it is worth pricing the first visit separately from the recurring one.
Estimating is the easy part
The jobs you never hear about cost more than the ones you mis-measure. BDEVY builds the marketing, systems and automation that bring them in.