Written for owners of US cleaning businesses: janitorial and custodial contractors for offices, medical buildings, schools and property managers, residential and maid services, and specialty cleaners doing post-construction, move-out, window, carpet and biohazard work.
The short version
- Work out labor hours from square feet.Divide cleanable square feet by your own production rate for each space type. Multiply by cleanings a year.
- Cost every hour with its full burden.Add payroll taxes, workers' comp and paid leave to the wage. Then add supplies, supervision and equipment.
- Divide by one minus overhead and margin.Margin is a share of the price, not the cost. Check the result per square foot per month last.
Commercial cleaning is bid on the building, not the hour. A bid built on the wage alone loses money, because payroll taxes, workers' comp, paid leave, supplies, supervision and your own overhead all sit on top of it.
- Measure cleanable square feet by space type.Offices, restrooms, break rooms, lobbies and medical exam rooms clean at different speeds.
- Apply production rates.Use rates from your own time studies. ISSA's 612 Cleaning Times is the industry reference for rates by task.
- Multiply by cleanings per year.Five nights a week for 52 weeks is 260 cleanings.
- Cost the labor hour fully.Wage plus burden: Social Security and Medicare, federal and state unemployment, workers' comp and paid leave. Use your own payroll report and comp rate.
- Add supplies, supervision and equipment, then overhead and margin.Divide by one minus your overhead share and net margin, because margin is a share of the price, not of the cost.
| Labor: 2,971.43 hours x $18.00 x 1.20 burden (on unrounded hours) | $64,182.86 |
| Supplies at 5% of labor | $3,209.14 |
| Cost before overhead and margin | $67,392 |
| Annual bid price | $89,856 |
$67,392.00 / (1 - 0.10 - 0.15), with overhead at 10% and net margin at 15% of priceLabor hours are 40,000 / 3,500 square feet an hour x 260 cleanings = 2,971.43. The price is $7,488.00 a month, $0.1872 per square foot per month, or $345.60 per cleaning. The wage, the production rate and the burden are assumptions, not market data. The 20% burden stands for FICA at 7.65%, federal and state unemployment, workers' comp and paid leave; supervision and equipment are left out, so add your own.
Price per square foot is an output of the math, not an input, and a market price benchmark only counts from a named, dated survey.
The next wage increase is already in the bid
| Extra wages: $1.00 x 25 hours x 52 weeks x 12 cleaners | $15,600 |
| Employer FICA at 7.65% | $1,193.40 |
| Extra cost a year | $16,793.40 |
Florida's minimum wage rose from $14.00 to $15.00 on September 30, 2026.
Minimum wages change on January 1 in California, New York and most indexed states and cities, on July 1 in many California cities, and on September 30 in Florida. Write an escalation clause into every contract and renewal, and send escalation letters 60 days ahead of each change. For the January 1, 2027 changes, that means letters out by November 2, 2026. Where an account has no clause, send the client an open-book escalation request now and offer reduced frequencies as the alternative. Never cut hours worked off the clock. As of Oct 2026.
Residential: flat rate or hourly
Price homes at a flat rate by home size, or per hour with a minimum. Before you set a per-house pay rate, test each cleaner's effective hourly pay, including the drive time between houses, against the state minimum. That drive time is hours worked.
Write the source of every production rate on the bid sheet: your own time study, by space type. A bid you cannot trace back to measured rates is a guess.
Asked in Greymill
Labor hours: 40,000 / 3,500 x 260 cleanings (5 nights x 52 weeks) = 2,971.43 a year
Labor: 2,971.43 x $21.60 ($18 plus 20% burden) = about $64,183
Supplies (assumed at 5% of labor): about $3,209
Cost: $67,392, plus your own supervision and equipment
Price: $67,392 / (1 - 0.10 - 0.15) = $89,856 a year, or $7,488 a month
At 15 cents you'd bill $6,000 a month and run at a loss. That's $17,856 a year below the price you need, more than your whole planned profit of about $13,478.
The trap: divide by 0.75. Adding 25% to cost gives only $84,240, because margin is a share of the price, not the cost.
LEO can draft an escalation clause, so the next wage rise doesn't come out of this margin.
Ask it about your own business
Paste this into Greymill with your own figures, and Cash & Profit works it through for your business.
I run a cleaning business in [state], in the US. I am bidding a [type of building] with [cleanable square feet by space type], cleaned [frequency]. My production rates from time studies are [square feet per hour by space type], I pay [hourly wage] with a burden of [percent from my payroll report], supplies run about [amount], and I want overhead of [share] and a net margin of [share]. Build the bid sheet, show the price per month and per square foot per month, and draft the escalation clause for the contract.
More for cleaning and facilities in the US
- Making payroll every week while accounts pay in 45 daysWhy a growing janitorial business runs short of cash, how much working capital the payroll gap needs, and the forecast, terms and funding that close it.Read the lesson
- Does my state charge sales tax on cleaning, and what do I file for subcontractors?Whether janitorial work is taxable depends on the state and the type of building, and the 1099-NEC threshold for paying subcontractors changed for 2026.Read the lesson
- The registrations and OSHA rules a cleaning company actually has to meetMost states do not license cleaning, but registration, hazard communication, bloodborne pathogens, injury reporting and a few state rules apply to janitorial and specialty cleaners, with a HazCom date this fall.Read the lesson
- The janitorial contract clauses that decide whether an account makes moneyEscalation, termination, indemnity, insurance and payment terms decide an account's margin long after the bid, and recurring residential plans carry their own auto-renewal rules.Read the lesson
- Paying cleaners right for drive time, per-house pay and overtimeDrive time between houses, flat per-house pay, state minimums and pay-frequency rules are where cleaning businesses underpay without meaning to.Read the lesson
- Winning janitorial accounts from property managers, public buyers and federal agenciesCommercial buyers choose on readiness, records and a credible start-up plan, public bids add registrations and wage determinations, and taking over an account can bring the previous crew with it.Read the lesson
- Our cleaners are on 1099s and someone is asking whether they are really employeesPaying your own cleaners as independent contractors, or running cleaning teams as franchisees or app workers, can fail state and federal tests and bring back payroll tax, wages and penalties.Read the lesson
Open the interactive lesson · Every cleaning and facilities lesson · What Greymill knows about the trade
Sources
The primary sources behind this lesson, checked Oct 2026.
- OEWS (Pricing and bid math: worked in dollars)
- Art. X, sec. 24 (Read the user, federal, state or local, and switch rules)
- FOMC calendar and statement (Read the user, federal, state or local, and switch rules)
- October 28, 2026 statement; FOMC calendar 2026 (federalreserve.gov/monetarypolicy/fomccalendars.htm) (Read the user, federal, state or local, and switch rules)
- 1910.1030(c) (Deliverables in house style)
- IRS Publication 15 (2026), Social security and Medicare tax rates and wage bases (Deliverables in house style)
- 15 U.S.C. 8403(1) to (3) (Deliverables in house style)
- 1904.32(b)(6) (The us calendar: payroll, OSHA 300A, minimum wage and renewals)
- 29 CFR 1910.1200(j)(2)(ii) and (j)(3)(ii), alternative workplace labeling (The us calendar: payroll, OSHA 300A, minimum wage and renewals)
- Filing dates; Pub. 15 sections 12 and 14; IRC 7503; applicable timely-deposit filing extensions (The us calendar: payroll, OSHA 300A, minimum wage and renewals)
- Cal. Lab. Code 1061(b)(1) to (3), (e), (f) (Hard cases: accounts, state LAW and bids)
- Admin. Code 22-505; Lab. Law 191 (Hard cases: accounts, state LAW and bids)
- 41 U.S.C. 6702(a), 6703(1) to (2), 6707(c) (Hard cases: accounts, state LAW and bids)
- 29 U.S.C. 206(a)(1), 207(a)(1) (People and pay: FLSA and state wage law)
- Lab. Code 1182.12 (People and pay: FLSA and state wage law)
- Lab. Law 652; NYSDOL "will stay the same"; DIR release (Finance certified July 31, 2026) (People and pay: FLSA and state wage law)
- Lab. Code 62.051 (People and pay: FLSA and state wage law)
- 785.35, 785.38, 785.48(b) (People and pay: FLSA and state wage law)