How it works
Three-input math you can defend in a renewal conversation
- Calculate fully loaded cost
Start with salary, add benefits, payroll tax, training, tools, and unbillable time. For most MSPs this lands between $55 and $85 per technician hour.
- Apply your overhead multiplier
Office, software, leadership cost, sales and marketing, and other indirect expenses. Most MSPs run between 1.3x and 1.6x.
- Set a margin target you can hit
Healthy MSPs target 65 to 75 percent gross margin on labor. If your current rate is below the calculator output, you are not pricing — you are subsidizing.
- Re-run at renewal time
Inflation, payroll changes, and tool stack changes all shift the calculation. Run it before every renewal cycle and use the output to anchor pricing conversations.