Guides
Tree service pricing that protects margin on every job
A useful answer to 'how to price tree service jobs' starts with the work the team must deliver reliably, not with a borrowed benchmark. This guide treats the topic.
What to take away
- Price every job as crew hours times a burdened crew rate, plus equipment, disposal, overhead recovery, and target profit.
- A burdened crew hour commonly runs 1.6 to 2.0 times the bare wage once payroll taxes, workers compensation, and paid time off are counted. Treat that as a typical range.
- Recover overhead by dividing yearly overhead by the billable crew hours you expect to sell, then adding that figure to every job hour.
- Routine residential pruning is often priced to a 50 to 60 percent gross margin, with large removals lower. These are planning ranges, not published benchmarks.
- Minimum job charges and an emergency multiplier stop small and storm jobs from draining the schedule.
Build the cost first, then the price. Packages shape what you sell, so settle the offer before the arithmetic: the guide to tree service packages covers design, and this article covers the numbers.
Cost of a crew hour
Start with the wage you actually pay, then add everything that arrives with an hour worked. The Bureau of Labor Statistics publishes wage estimates for tree trimmers and pruners by state and industry, which gives a defensible starting point rather than a guess.
- Write down the base hourly wage for each crew member.
- Add payroll taxes and the workers compensation premium for your state and class code.
- Add paid time off and holidays as a percentage of hours worked.
- Add non-billable paid timeloading, saw sharpening, truck checks, travel between jobs.
- Divide total yearly crew cost by billable crew hours. That single number is the burdened crew hour.
A climber at 28 dollars an hour and a ground worker at 20 dollars, burdened at 1.65, cost roughly 46 and 33 dollars an hour. Those are typical planning figures.
Overhead recovery and break-even
Overhead is what you pay whether or not a truck leaves the yard: insurance, office wages, software, rent, marketing, truck payments, and your own salary. Add it for the year, then divide by the billable crew hours you expect to sell.
If overhead runs 85,000 dollars across 4,800 billable crew hours, recovery is about 18 dollars per crew hour. Every job carries that share before profit starts.
Divide annual fixed costs by average gross profit per job to find break-even. The SBA business guide sets out the planning and finance work behind those figures.
Keep the paperwork that proves the numbers. The IRS explains the records a small business should keep for purchases, payroll, and assets.
The pricing formula
Price = (crew hours x burdened crew rate) + equipment + disposal + materials + overhead recovery + target profit.
Margin and markup are not the same number. To hit a 50 percent gross margin, divide total job cost by 0.50. A 50 percent markup on cost returns only a 33 percent margin.
Leave the overhead line out and the margin looks healthy while the bank balance does not. The tree service pricing and profit guide follows how the target shifts when the mix moves toward removals and storm work.
Example: a 60-foot silver maple removal
One climber and two ground workers, six hours on site, chips left for the homeowner.
60-foot silver maple removal
| Line | Basis | Amount |
|---|---|---|
| Labor | 6 hours x (46 + 33 + 33) | 672 |
| Chipper and truck | 45 per hour x 6 | 270 |
| Disposal | Logs hauled to the yard | 120 |
| Fuel and consumables | Flat | 60 |
| Overhead recovery | 18 per crew hour x 6 | 108 |
| Total cost | 1,230 | |
| Price at 50 percent gross margin | 1,230 / 0.50 | 2,460 |
Gross profit on that price is 1,230 dollars. Quote 2,450 or 2,500 and hold it. A discount agreed at the kitchen table comes straight off that profit.
Equipment hours are the line most estimates miss. A paid-off chipper still burns fuel, knives, belts, and a rebuild fund, which the used versus new equipment comparison covers in detail.
[figure 1]
New versus used equipment cost
New equipment
- Ownership
- Higher
- Lease
- Higher
- Rental
- Comparable
- Maintenance
- Lower
- Inspection
- Scheduled
- Downtime
- Lower
Used equipment
- Ownership
- Lower
- Lease
- Lower
- Rental
- Comparable
- Maintenance
- Higher
- Inspection
- More frequent
- Downtime
- Higher
Pricing approaches, and where each wins
Pricing approaches
Where it wins
- Flat rate per job
- Residential pruning a homeowner can compare
- Hourly with a minimum
- Diagnostic and open-ended work
- Tiered packages
- Work that stacks around one visit
- Maintenance agreement
- Recurring dormant-season pruning
- Outcome-based price
- Customers buying certainty
Typical figure
- Flat rate per job
- Set from the formula, 50 to 60 percent gross margin
- Hourly with a minimum
- Two crew hours minimum, or a floor near 250 dollars
- Tiered packages
- Price the middle tier fully, since it carries the margin
- Maintenance agreement
- Lower margin, protected by a minimum visit charge
- Outcome-based price
- Highest margin, needs a reputation behind it
Flat rates suit comparable residential work because the customer can read the quote. Hourly suits jobs where nobody knows how long the tree will take. Using both across one week is fine. Using both inside one quote is not.
Minimum charges and storm work
Every estimate needs a floor. A single small prune across town can cost more in travel and setup than the work itself, so set a minimum of two crew hours plus a trip charge.
Storm work is priced differently. Demand spikes, the work is dangerous, and overtime is common. An emergency multiplier of 1.5 to 2.0 on labor and equipment is a typical range, quoted in writing before dispatch.
