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Profit Recovery Review
Cost-control monitors glowing in a dark industrial office.

Where the money actually goes 01 — page 1 of 8

True Cost

What does an hour really cost before you quote it?

If you only look at wage, your quote is already weak. Labour burden, overhead burden, task-specific burden, shift differential, and overtime change what an hour really costs — and what you need to charge to protect profit.

Calculate true labour costTrue Labour Cost Calculator See ProjectWatchPRO in actionWalk through a live job

  • See true cost clearly

    Know what an hour really costs.

  • Quote from real numbers

    Build estimates from true cost.

  • Compare cost vs charge-out

    See the gap before you leak profit.

  • Stop underpricing before it starts

    Small math errors become big margin leaks.

The 30-second answer

True labour cost is the worker’s wage plus applicable shift differential, labour burden, overhead burden, task-specific burden and overtime premium.

WageSDLBROBRTSBOT

SD, TSB and OT are conditional components — they do not apply to every hour in every circumstance. Quote future work with the approved company-average LBR because the future employee is unknown; use the individual employee’s LBR once the work is actually being performed.

What it looks like, what it costs, and why it keeps happening

Does this sound familiar?

  • You quote from wage or a rough loaded rate.
  • Two people at the same wage do not cost the same.
  • Overtime and burden show up after the quote is already out.
  • You only find out the labour math was wrong after the job starts.

This is what it’s costing you

  • 6 field employees
  • × 160 hours / month
  • × $18 hidden labour-cost gap

$17,280 / month

$207,360 a year in missed margin before the job is even won. Illustrative arithmetic example, not a documented case result.

Why the usual way fails

  • Wage gets treated like total cost.
  • A blanket markup hides the real math.
  • One shop rate ignores task and employee differences.
  • Overtime and burden show up too late.

Why it keeps happening

This is the Bad Math Problem described in Profit Defended.

  • Labour burden is missing or guessed.
  • Overhead is not turned into a real hourly rate.
  • Task-specific burden, shift differential, and overtime get missed.
  • Nobody sees the true cost until after the quote is already built.

If the labour-cost baseline is wrong, the quote and job decisions built on it are wrong too.

The PPS + PWP way to know true cost before you quote

Profit Pulse System builds the engine. ProjectWatchPRO automates the work.

How to fix it

  1. Start with the employee’s base wage.
  2. Calculate labour burden from real payroll burden rather than a guessed loaded-rate percentage.
  3. Calculate overhead burden from the actual P&L and billable production hours.
  4. Attach task-specific burden to the tasks that actually create that cost.
  5. Add shift differential and overtime premium when they apply.
  6. Build true labour cost by employee and task.
  7. Use the approved company-average LBR when quoting future work.
  8. Use the actual employee’s individual LBR when the job runs.
  9. Compare true cost to charge-out before the work is sold and again when the work is performed.

True labour cost = Wage + SD + LBR + OBR + TSB + OT

The 9 steps of Profit Pulse System

  1. 1Overhead Guru
  2. 2Labor Analyst
  3. 3Burden Builder
  4. 4Task Architect
  5. 5Bulletproof Quote
  6. 6Schedule Master
  7. 7Pulse Monitor
  8. 8Drift Detector
  9. 9Profit Pulse Loop

Used to build profit defense. Orange steps are the ones this page depends on.

ProjectWatchPRO gives you

  • True labour cost by employee, job, task and shift.
  • Wage + SD + LBR + OBR + TSB + OT in one cost stack.
  • Charge-out vs true-cost visibility.
  • Quote-ready labour numbers.
  • Real-time actual labour cost while the job runs.

What gets better when you fix this

  • Quotes are built from numbers you can explain and defend.
  • Labour sell rates are set above a known cost floor.
  • Staffing and overtime decisions have a real cost attached to them.
  • Less underpricing and fewer surprises after the work starts.
  • More confidence before the job starts.

What you actually see

Live job margin, while the job is still running

Where true cost shows up in the day-to-day view: quoted margin, margin right now, and the hours behind the number. Representative view.

How much longer can you afford to wait?

  1. Next 30 days~$17,280
  2. Next 60 days~$34,560
  3. Next 90 days~$51,840

Extensions of the illustrative $17,280 / month arithmetic above — not a promise of loss or recovery. Figures are illustrative examples, not documented client results. We replace them with your numbers during the Profit Recovery Review.

Questions owners ask

What is true labour cost per hour?

True labour cost is the worker’s wage plus applicable shift differential, labour burden, overhead burden, task-specific burden and any overtime premium. It is the number a quote has to be built on, because it is what the hour actually costs your company.

Why is wage alone the wrong number to quote from?

Wage covers only the pay rate. Burden, overhead and overtime are still spent whether or not the quote allows for them, so quoting from wage builds a margin that was never really there.

How do contractors calculate a charge-out rate that protects margin?

Start from true cost per hour for the crew doing that task, then add the margin you intend to keep. If the charge-out rate is set before true cost is known, the margin is a guess.

Does overtime change the true cost of a job?

Yes. Overtime raises the cost of every hour worked in that window, so a job that runs long on overtime can lose margin even when the total hours look close to the estimate.

Let’s calculate your true cost.

We’ll show you what an hour really costs — and where your quotes are leaking margin.

Calculate nowTrue Labour Cost Calculator See ProjectWatchPRO in actionTake a guided tour

Knowing true cost isn’t the finish line. The next question is whether that cost actually made it into the quote.