Maintenance Contractor vs In-House Cost Calculator
Hire a technician or call a contractor is a make-or-buy decision that depends on how many hours of work you really have. This calculator compares both on cost and gives the break-even volume.
Your numbers
After leave, training, meetings, travel and waiting.
Your results
The in-house line treats headcount as continuous. In practice you hire whole people, so cost steps up at each additional technician. Quality, response time, skills and safety qualification are not priced here.
Annual cost vs work hours
Sweeps Work hours needed per year from 200 to 4000, holding your other inputs fixed.
Compare contractor and employee hours from ERP data
An optional review of how work orders record internal and external labor.
Optional. The tool and every export work without this. No spam.
How to use it
Enter the work hours you need to cover, the technician wage and burden, paid hours and the productive share of those hours. Add yearly tools, vehicle and training costs. Then enter the contractor rate, number of call-outs and the travel or call-out fee. The calculator shows the annual cost of each option, the difference, and the break-even hours where one technician costs the same as a contractor.
- Use productive hours, not paid hours, as the capacity of an employee.
- Include supervision and overtime cover if they would otherwise be hidden.
- Use a realistic contractor rate that includes the usual markup and minimum charges.
The formula
Annual cost of a technician = wage x paid hours x (1 + burden) + extras. Productive hours = paid hours x productive share. In-house cost = work hours divided by productive hours, multiplied by technician cost. Contractor cost = work hours x contractor rate + call-outs x fee. Break-even hours = technician cost divided by contractor rate, which is the work a contractor would need to do to cost as much as one salary.
Reading the result
Below break-even hours, a contractor is cheaper because you are not paying for idle capacity. Above it, in-house usually wins on cost, and the gap widens with volume. The chart crosses at the point where the workload fills about one technician. Remember that specialized work, such as certified electrical or PLC work, may justify a contractor at any volume.
Common mistakes
Comparing the wage to the contractor rate ignores burden and non-productive time. Ignoring response time is also costly: a contractor with a two day lead time can turn a small fault into long downtime. Hybrid models often work best, with a core crew for routine and emergency work and contractors for peaks, shutdowns and specialist tasks. Track both in the ERP by work order resource type for a fair comparison.
Frequently Asked Questions
What burden percentage should I use?
Payroll taxes, health insurance, retirement contributions and paid leave commonly add 25 to 45 percent in many regions. Ask finance for your actual loaded rate, since it differs by country and employer.
Why use productive hours?
A technician is paid for the whole year but is not on a work order for all of it. Leave, training, meetings, travel and waiting reduce usable time, so the effective hourly cost is higher than the wage suggests.
Does the contractor rate include materials?
No. This model compares labor only. Add parts separately to both options, or add a markup to the contractor side if they supply materials.
What about quality and skills?
They are not priced here. Weigh familiarity with your equipment, response time, safety induction and warranty on the work alongside the cost figure.
Netray can help report contractor and in-house hours side by side from your ERP so the decision rests on actuals. The calculator works without any follow-up.
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