How to job cost a cleaning, lawn care or trade job

What is job costing, and how do I do it for a small service business?

Job costing means adding up what each job actually cost you so you can see which jobs make money. For a cleaning, lawn care or trade job, the cost is direct labor (hours × wage, plus payroll costs) + materials and supplies + vehicle and travel + equipment, disposal and subcontractors + a share of overhead (monthly overhead ÷ monthly billable hours × the job's hours). Price minus that total is the job's profit; profit ÷ price is the margin. Tag every receipt and timesheet with a job ID so the numbers come from real records, and compare each finished job with its estimate.

Last verified October 28, 2026 against IRS: What kind of records should I keep, IRS: How long should I keep records?, SBA: Calculate your startup costs (break-even analysis), IRS: Standard mileage rates. Fee change tracker · How we verify

The five cost buckets

Bucket	What goes in it	Where the number comes from
Direct labor	Crew hours on the job (and paid drive time) × wage, plus employer payroll costs	Timesheets or clock-in app, payroll reports
Materials and supplies	Chemicals, parts, mulch, filters, bags used on that job	Receipts and supplier invoices tagged with the job ID
Vehicle and travel	Miles driven for the job × your cost per mile; job-specific parking and tolls	Mileage log (see what a mileage log needs)
Equipment, disposal, subs	Rentals, dump fees, permits, subcontractor bills, payment processing fees on the invoice	Invoices and processor statements
Overhead share	Insurance, phone, software, rent, owner admin time, spread across billable hours	Last month's or last quarter's expenses

The SBA calls costs that don't change with how much work you do fixed costs and lists rent, salaries, property taxes, insurance, interest, depreciation as examples. It also describes semi-variable costs, such as phone, repairs, indirect materials, indirect labor, fuel, power, and suggests splitting them into their fixed and variable parts. For job costing, the variable parts go on the job; the fixed parts go into overhead.

A worked example

A made-up lawn renovation job, priced at $450.00, to show the arithmetic. These are not industry benchmarks; use your own numbers.

Line	Calculation	Cost
Direct labor	6 crew hours × $22/hr × 1.12 (payroll costs, your figure)	$147.84
Materials	Seed, fertilizer, bags (receipts)	$38.00
Vehicle	24 miles × 76¢ per mile (stand-in rate, see note)	$18.24
Equipment	Aerator rental share	$15.00
Direct cost		$219.08
Overhead share	6 hours × $15.00/hr ($1,800 monthly overhead ÷ 120 billable hours)	$90.00
Full job cost		$309.08
Job profit	$450.00 − $309.08	$140.92 (31.3% margin)

Vehicle note: the 76¢ per mile figure is the IRS business standard mileage rate for July 1 to December 31, 2026, a tax deduction rate. Some owners use it as a simple stand-in for vehicle cost per mile when job costing; your actual cost (fuel, repairs, insurance, depreciation) may be higher or lower. The job profit calculator does this arithmetic for you, including the price you'd need for a target margin.

How many jobs cover your overhead? (break-even)

The SBA's break-even formula is: break-even units = fixed costs ÷ (price per unit − variable cost per unit). For a service business, a "unit" can be a typical job. In the example, each job leaves $230.92 after direct costs, so $1,800 of monthly overhead needs about 7.8 jobs a month just to break even. The SBA also suggests adding a little extra, say 10%, for expenses you can't predict.

Keep the records that back it up

Job costing runs on the same paperwork you need for taxes. The IRS lists supporting documents such as sales slips, paid bills, invoices, receipts, deposit slips, canceled checks, and says documents for purchases and expenses should identify the payee, the amount paid, proof of payment, the date incurred and a description of the item or service. Writing the job ID on each one is what turns ordinary bookkeeping into job costing. The IRS generally says to keep records for 3 years (longer in some situations) and employment tax records for at least 4 years.

A routine that takes 10 minutes a week

Every job gets an ID on the estimate, the schedule, the receipts and the invoice.
Each Friday, enter hours, materials and miles for finished jobs.
Compare each job's actual cost with the estimate. Two or three jobs that ran over usually point to the same cause: underestimated hours, travel or materials.
Once a month, update the overhead rate from last month's expenses and billable hours.
Reprice the job types with the thinnest margins, and check that cash timing still works with the 13-week cash flow forecast.

Cleaning or lawn care? See the Cleaning Business Bookkeeping & Job Profit Tracker or the Lawn Care Business Bookkeeping & Job Profit Tracker.

Questions

What is job costing in simple terms?

Tracking what each individual job cost you (labor, materials, travel, equipment and a share of overhead) and comparing it with what you charged, so you know the profit on every job instead of only the month.

How do I include overhead in a job cost?

Divide your monthly overhead (insurance, phone, software, rent, admin time) by the billable hours you work in a month to get an overhead rate per hour, then multiply by the hours on the job.

What is the difference between job costing and pricing?

Pricing sets what you charge before the job; job costing measures what the job actually cost afterward. Job costing results feed back into better prices and estimates.

How do I work out how many jobs I need to break even?

Use the SBA break-even formula: fixed costs ÷ (price per job − variable cost per job). The SBA suggests adding about 10% extra for unpredictable expenses.

What records should I keep for each job?

The IRS lists supporting documents such as sales slips, paid bills, invoices, receipts, deposit slips, canceled checks. Put the job ID on each, plus timesheets and a mileage log. The IRS generally says to keep records 3 years, and employment tax records at least 4 years.

Can I use the IRS mileage rate for job costing?

You can use it as a simple stand-in (76¢ per mile for July to December 2026), but it is a tax deduction rate, not your actual cost. If your real cost per mile is known, use that.

General information, not tax, legal or accounting advice. Rates change: check the linked official source before you rely on a number. Not yet reviewed by a CPA or EA.