Get the kit, from $19

Free calculators / Labour Cost Calculator for Makers

Labour Cost Calculator for Makers

What is your time worth in each product?

If you make what you sell, your time is a cost like any other. Leave it out and every price you set is too low. Put in what you want to earn an hour and see what each unit really costs.

Your numbers

Your time, per unit
$5.00
Full cost per unit, with your time
$8.40
Price for your margin
$16.80
What that price pays you an hour
$67.00

Materials alone would suggest a much lower price. Your time is 59.5% of what each unit costs.

The Products tab in the kit holds every cost that goes into a unit, so your time is priced in on every product, every time.

See the Back Office Kit, from $19

How the sum works

  1. Your time per unit = hourly rate times minutes per unit, divided by 60.
  2. Full cost per unit = materials and packaging plus your time.
  3. Price for your margin = full cost divided by (1 minus the margin).
  4. What the price pays you an hour = (price minus materials) times 60, divided by minutes per unit.

Questions

Why should I charge for my own time?

Because a price that only covers materials means you work for nothing. If the business grows and you need to pay someone to make the product, a price with no labour in it cannot pay them.

What hourly rate should I use?

At least what you could earn doing something else with the same hours. Many makers start with a figure they would accept as an employee and adjust as the business proves itself.

The price comes out higher than similar products. What now?

Make it faster, use less costly materials, or sell it to people who value handmade work and will pay for it. Selling below your full cost is not a fourth option, because it loses money on every unit.

Should I time myself?

Yes. Time a batch from setup to packing and divide by the units made. Most makers find it takes longer than they thought.

This was one sum

The Back Office Kit runs all of them, for every product, together.

One Excel workbook that prices your products, tracks your stock, logs your orders and builds your invoices and wholesale line sheet. One payment of $19. Download the moment you pay.

Get the kit for $19 Watch it work
The dashboard tab of the Back Office Kit: revenue, profit, cash, stock value and items to reorder.

More free calculators