Tree service
Tree Service Pricing Calculator
Prices tree work from cost upward, where equipment and insurance dominate the overhead.
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 AuditHow the calculation works
Direct cost divided by one minus overhead and margin together, so the price carries both rather than layering one on the other. The overhead in tree care is unusually heavy and unusually fixed: a bucket truck, chipper, grinder, chip truck and trailer are financed, insured and maintained whether or not they work, and insurance on this trade is a large multiple of what a light trade pays. That base has to be recovered across the jobs actually completed.
What moves the number
- Equipment ownership across realistic annual working days.
- Insurance, which on this trade is a major fixed cost.
- Seasonality and weather, which cost working days.
- Disposal and haulage of debris, which is a per-job cost.
Where this one goes wrong
Markup and margin are not the same number, and dividing by one minus the margin is what makes the price carry it. Beyond that, the specific trap in tree care is pricing from peak season utilisation: storm work and the busy months do not represent the year, and frozen ground, high winds and rain all stop work while the equipment payments continue. Building the overhead rate on realistic working days rather than a good quarter is what keeps the business solvent through a quiet winter.
Before you quote
- Build the overhead rate on realistic annual working days.
- Check the resulting margin against the markup figure.
- Recover disposal and haulage per job rather than absorbing it.
Questions
About this calculator
Why is tree work priced higher than it looks like it should be?
Equipment and insurance. A bucket truck, chipper, grinder and chip truck are financed, insured and maintained whether they work or not, and workers compensation on tree work is among the highest class rates of any trade. That fixed base is recovered across the jobs actually done.
How should seasonality affect pricing?
The overhead rate has to be built on realistic working days rather than peak months, because frozen ground, wind and rain stop work while payments continue. A business priced off a busy quarter runs short across the year, which is why the quiet season is funded by the busy one.
Should debris disposal be a separate line?
Either way works provided it is genuinely recovered, and separating it makes variation by volume and haul distance defensible. What causes losses is treating it as incidental, since on a large removal the chipping and haulage is a significant share of the job's cost.
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 $60.
- Other direct costs ($). 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 | $560 |
| Materials cost | $60 |
| Other direct costs | $0 |
| Overhead rate | 22% |
| Target net margin | 15% |
What comes out
| Result | Value |
|---|---|
| Price to quote main result | $984.13 |
| Direct cost | $620 |
| Overhead recovered | $216.51 |
| Net profit | $147.62 |
| Gross margin | 37.0% |
| Markup on direct cost | 58.7% |
Quote $984.13 to cover $620 of direct cost, recover $216.51 of overhead and leave $147.62 of net profit. That is a 58.7% markup on cost.
How sensitive the answer is
Holding everything else steady and changing only labour cost, this is what happens to price to quote. It is worth knowing which of your inputs the answer actually hinges on, and which barely move it.
| Labour cost ($) | Price to quote |
|---|---|
| $280 | $539.68 |
| $420 | $761.90 |
| $560 example above | $984.13 |
| $840 | $1,429 |
| $1,120 | $1,873 |
Every other input is held at the example value while this one changes, which is not how a real job behaves. Treat it as a guide to which number matters most, not as five separate quotes.
What each figure means
- Labour cost ($)
- Burdened: wages plus tax, insurance and the vehicle, not the hourly wage.
- Materials cost ($)
- A money amount, starting at $60.
- Other direct costs ($)
- 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. |
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.