Gross margin vs what a painting company keeps
Painters mostly talk in gross margin: the price minus labour and paint, before overhead. On a simple one-story exterior, about 45% gross margin is treated as the mark, and a job that comes in lower is the one to dig into. Some painting companies run as high as 65% gross margin per job.
What the company keeps is lower, because gross margin still has to pay insurance, the van, the storage unit and marketing. In the sample repaint, $2,345 is left on an $8,663 price after all of that and every wage, the owner's included: about 27%. That is the business's money, not the owner's pay (more in overhead and profit).
A quick way to keep the two apart: gross margin tells you whether the job was priced right for its labour and paint, and what's left after overhead tells you whether the company as a whole is making money.
How much should a painter charge per hour?
At least the break-even rate, which is $49.25 per billable hour for the sample shop of an owner who leads the crew plus two painters. That covers wages, burden and overhead, before cushion and profit.
A common shortcut for burden (payroll taxes and workers' comp on top of the wage) is a flat 1.2 multiplier: every $10 of wage costs about $12 once burden is added. Check your own workers' comp rate, since it varies by state and job class.
The bigger lever is billable time. An owner who runs estimates, paint store trips and the books bills far fewer hours than the painters, so the owner's hour costs close to double the wage. Overhead ends up a small slice of the rate. The full method is in the true hourly rate guide, or run your own in the free true hourly rate calculator.
Hourly and daily figures painters shared
These are single examples from the pricing videos we studied, not averages:
| A | B | C | |
|---|---|---|---|
| 1 | Figure | Amount | Where it came from |
| 2 | Hourly rate from a formula | $72 an hour: average two wages, add 20%, double it | A painting coach |
| 3 | Hourly rate, burdened cost doubled | About $32 cost, $64 charged | A painter working with a CPA |
| 4 | Day rate, two painters | $894.40, about $56 per painter-hour at 8-hour days | One owner's interior quote |
| 5 | Time and material, exterior repairs | $45 to $70 an hour | A coach who bills repairs |
| 6 | Sample repaint earnings | About $75 per labour hour against $49.25 break-even | Our sample quote |
The coach's formula and the sample line up: 91 hours at $72 plus about 30 gallons at the same paint pricing comes to roughly $8,950, against the sample's $8,663.
Why paint needs its own markup
Paint gets a markup because you buy it, carry the cost, haul it, store it and dispose of what's left. Sell it at cost and those jobs quietly pay you less than you think.
Here is what that looks like. One painter doubled his labour and sold paint at cost. He was aiming for a 50% gross margin and kept landing around 35%, because the paint part of every job was earning nothing. The labour was priced right; the paint was the leak.
A simple rule is to charge around 80% of the store's retail price and buy well enough that this is about double your cost: paint at $25 sells for $50. The owner with the $894.40 day rate does the same, doubling his roughly 30 gallons.
How big is paint in the price? Painters put it at about 10 to 15% of the job, and one coach gives 10 to 20% for materials and 25 to 45% for labour. The sample repaint lands at about 16% for paint and sundries at cost.
Turning painters' margin talk into a markup
To hit a gross margin, divide cost by one minus the margin: $5,000 of labour and paint at a 50% target is $5,000 / 0.5 = $10,000. Here is what each margin painters talk about needs as a markup:
| A | B | C | |
|---|---|---|---|
| 1 | Gross margin | Markup on labour and paint | When you hear it |
| 2 | 40% | 67% | Labour and paint set at 60% of the price |
| 3 | 50% | 100% | Owners who double labour and paint |
| 4 | 55% | 122% | A 50% shop after a 10% price rise |
| 5 | 65% | 186% | The top of what some companies run |
A 100% markup is only a 50% margin, which is why owners who "add 50%" land far below the coaches' target. Add 50% to $5,000 and the price is $7,500, a margin of just 33%. The general version is in markup vs margin.
Close rate: when a painting company should raise prices
Close rate, the share of estimates you win, is the check on all of this. A CPA who works with painting companies calls 30 to 40% the ideal zone and reads steady wins above 45% as a sign your prices are low.
The logic is simple. If nearly every homeowner says yes, nobody is comparing you and finding you expensive, so there is room in the price. Raise it in steps, 5 or 10% at a time, and watch the close rate. If it stays in the 30 to 40% range, the higher price is working. Win nearly everything and the margin table above is telling you where to go next.
Set your painting rate once
The Painting Pricing Calculator works out your break-even rate from your own crew and overhead, marks up paint and rentals, and shows the profit and per-hour earnings on every quote before you send it. See the full worked repaint, with the day rates and room prices painters use, in how much to charge for painting.