Service pricing tiers calculator
Find out which tier actually makes you money.
Three tiers look tidy on a pricing page — but which one actually pays? The answer depends on delivery hours, not the headline price.
Enter each tier's price, the hours it takes, and how many clients you have. The calculator shows margin per tier and your blended margin.
Why tiering exposes your real margins
A single price hides the truth about your business. Some engagements are lean and profitable; others quietly eat your week. Tiers force the comparison into the open: each level has a price and a delivery cost, and the gap between them is your margin. Pricing tiers is not just a sales tactic — it is how you discover which work actually pays.
The calculator turns three tiers into monthly revenue, labor cost, and margin per tier, then blends them across the clients you actually have.
Margin is not the same as price
The most expensive tier is rarely the most profitable per hour. A premium package often needs more hand-holding, custom work, or meetings than its price suggests, dragging its margin below a simpler mid-tier. The calculator shows margin percentage per tier, not just the headline price, so you can see where the money really is. Often the "boring" middle tier wins on margin because it is the most systematised.
Hours of delivery are the variable that kills tiers
Two tiers can have similar prices but wildly different margins if one takes twice the hours. When you set a tier, estimate the hours honestly — not the hours you hope it takes, but the hours it actually consumed last time. A tier that looks profitable at five hours of delivery collapses at twelve. The calculator multiplies hours by your cost per hour, so an inflated hour count flows straight through to a smaller (or negative) margin.
Use tiers to shape demand
Tiers do double duty: they give buyers an easy yes (the lower tier) and an aspirational upgrade (the top tier). Most buyers pick the middle. That is useful — it means your highest-volume tier is usually the one whose margin you should protect most fiercely. If your middle tier has a thin margin, you are doing a lot of work for little reward, and the fix is to either raise that tier's price or cut its delivery hours.
Blended margin is the number to watch
Per-tier margins are interesting; the blended margin across all your clients is what pays your bills. A gorgeous 80% margin on one premium client is dwarfed by a thin 20% margin across ten smaller ones. The calculator's blended figure tells you the true profitability of your mix. If the blend is low, the lever is not "charge more everywhere" — it is "move clients up tiers or drop the lowest-margin work."
Keep tiers simple
Three tiers is the classic count for a reason: good, better, best. More than that and buyers freeze or cherry-pick the cheapest. Name them by outcome, not by feature lists, and make the differences visible in delivery hours so the margin gap is real and repeatable rather than a pricing fiction.
Estimates only. "Your cost per hour" is the fully-loaded value of your time (often your target or effective hourly rate), not your billing rate. Margins scale linearly with the hours and client counts you enter. The calculator ignores software, subcontractor, and overhead costs beyond your time — add those to the cost per hour for a true picture.
Frequently asked questions
What should "your cost per hour" be?
The fully-loaded value of your time — typically your target or effective hourly rate, not what you bill. It is the figure the calculator multiplies by delivery hours to get labor cost. If you understate it, every tier's margin looks better than reality.
Why is my most expensive tier not my most profitable?
Because profit is price minus delivery hours times your cost. A premium tier with heavy custom work can have a lower margin than a simpler mid-tier. The calculator shows margin percentage per tier so the real winner is visible.
How many tiers should I offer?
Three — good, better, best. It gives buyers an easy entry and an upgrade without overwhelming them. More than three and people freeze or default to the cheapest. Name tiers by outcome, not feature lists.
What is blended margin and why does it matter?
It is your weighted-average margin across all clients in all tiers. A high margin on one premium client means little if ten thin-margin clients dominate your book. Blended margin is the number that actually reflects your profitability.
How do I improve a weak tier?
Either raise its price or cut its delivery hours by systematising the work. The calculator shows the margin impact of each; thin tiers usually improve fastest by reducing the hours they consume, not by a hopeful price bump.
Should my cheapest tier be profitable?
It should at least be positive-margin. The lowest tier is often a foot-in-the-door, so a thinner margin is acceptable, but a negative one means you lose money on every entry client. The calculator flags that immediately.