Service Titan Knowledge Base

Calculate technician burden ratesLast updated on 09/12/2022

Burden rate is the hourly cost of an employee, which is used to calculate job costing, an estimation of the total cost of a job. Burden rate can vary widely between technicians. For example, a full-time technician with benefits has a higher burden rate than a part-time apprentice.

For accurate job costing, set up precise burden rates for each of your technicians.

Calculate burden rates with payroll costs

Burden rates include the following overhead costs:

  • Payroll taxes

  • Fuel costs

  • Insurance

  • Benefits

  • Related costs including, meals, training, etc.

By default, burden rates also include payroll costs:

  • Technician’s hourly rate

  • Commission-based pay

  • Earned bonuses

For best practices, use a full year’s costs for an accurate approximation. Calculate the burden rate for each technician using the following formula:

[yearly overhead costs + yearly payroll costs] / hours worked in the year

For example, in the last year, a technician’s overhead costs were $30,000 and they earned $70,000 in payroll based on 2,000 hours of work. Their burden rate is:

[$30,000 + $70,000] / 2,000 hrs = $50/hr

Edit a technician's burden rate

When you have calculated a technician’s burden rate, you can include it in their profile:

  1. Go to the navigation bar and click Settings settings.png.

  2. In the side panel, click People > Technicians.

  3. Click Edit next to the technician whose burden rate you want to update. Their profile page opens.

  4. Enter the technician’s burden rate in the Burden Rate field located in the Revenue & Cost section.

  5. When you’re done, click Save.

Calculate burden rates without payroll costs

You can configure your account to include payroll costs in job costing calculations. If you use this feature, your technician burden rate should not include payroll costs as they are already included in job costing. You only need to include overhead costs, such as:

  • Payroll taxes

  • Fuel costs

  • Insurance

  • Benefits

  • Related costs including, meals, training, etc.

If you include payroll costs in job costing, calculate burden rate for each technician using this formula:

yearly overhead costs / hours worked in the year

Tip: If you’re unsure if your account includes actual payroll costs in job costing, go to any posted invoice and view job costing information. If Performance Pay and Labor Pay are included, your account is configured to include actual payroll costs. In this case, you do not need to include payroll costs when calculating burden rate.

Use historic tracking of burden rates

With historic burden rate tracking, each technician’s burden rate is recorded on a weekly basis. Job costing reports use the technician’s burden rate at the time of the job, as opposed to their current burden rate.

For example, if a technician is promoted to a full-time position and receives an hourly raise with benefits, their burden rate increases. With historic burden rate tracking, jobs dated before the technician was promoted use their burden rate at that date when calculating job costing. This gives a more accurate measure of profitability.

Important note: Some features may not be currently included in your account and additional configuration may be required. Please contact technical support for details.