Security Guard Pricing: How to Set Your Hourly Bill Rate
Pricing too low kills margins. Pricing too high loses contracts. This guide covers cost-plus pricing, market-rate analysis, and how to calculate profitable bill rates.
Pricing security services correctly determines whether you're profitable or struggling. Price too low and you can't sustain quality; price too high and you lose bids. Here's how to find the right balance.
Calculate true costs (wages, burden, overhead, margin) before setting prices. Bill rates should be 1.4-1.6x pay rates minimum. Differentiate on value, not just price. Understand your breakeven and walk away from unprofitable contracts.
Understanding Your Costs
Before pricing, know your true costs per hour:
- Direct labor: Guard hourly wage
- Burden costs: Payroll taxes, workers comp, benefits (typically 25-35% of wages)
- Overhead: Office, management, insurance, equipment (varies widely)
- Margin: Profit you need to sustain and grow
Example: If you pay guards $15/hour, burden adds ~$4.50, overhead might add $2-3, so your cost is $21.50-22.50 before any profit. Billing $18/hour means you're losing money.
Where Your Money Goes
Here's a typical breakdown of expenses for a security company. Hover over each segment to understand the cost structure:
Security Company Cost Structure
Typical expense breakdown for contract security operations
Margin reality: With 70% labor costs and 5% margins, a 10% reduction in overtime directly adds 1-2 percentage points to net profit.
Pricing Models
Hourly Billing
Most common model. Bill rate should be minimum 1.4x pay rate, ideally 1.5-1.6x or higher for premium services.
Fixed Monthly Contracts
Calculate total hours × hourly rate, then add buffer for overtime, call-outs, and supervision costs.
Per-Service Pricing
For specific services like event security or alarm response, price based on value delivered rather than hours.
Factors Affecting Pricing
- Service type: Armed commands premium over unarmed
- Hours: Nights/weekends may have shift differentials
- Location: Remote sites have higher costs
- Volume: Large contracts may justify lower margins
- Risk: High-risk sites need higher pricing
- Technology: GPS tracking, reporting justify premiums
Competing on Value, Not Just Price
Race-to-bottom pricing hurts everyone. Differentiate through:
- Professional appearance and training
- Reliable scheduling and low turnover
- Technology (GPS verification, digital reports)
- Client portal access
- Responsive communication
- Insurance and compliance documentation
When to Walk Away
Some contracts aren't worth winning:
- Below your cost + minimum margin
- Demanding clients with unrealistic expectations
- High-risk sites without adequate pricing
- Clients who don't pay on time
Key Takeaways
- Know your true costs before setting prices
- Bill rate should be minimum 1.4x pay rate (1.5-1.6x preferred)
- Differentiate on value, not just lowest price
- Premium services (armed, technology) justify higher rates
- Walk away from unprofitable contracts
Written by
TeamMapTeam
TeamMap builds modern workforce management tools for security teams, helping companies track, communicate, and coordinate their field operations.
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