How security guard pricing works
Contract security is priced as a bill rate per guard hour: the client pays an hourly rate for every hour a guard is on their site. Behind that rate are four things: what you pay the guard, what you pay on top of their wages, your other costs for the contract, and your margin.
Get one of them wrong and a contract can lose money even when every shift is covered, which is why it pays to work the rate out the same way for every bid.
Step 1: Start with the guard's pay
Use the hourly rate you will actually pay the guards on this contract, not a national average. Pay varies by state, city, licence type (armed or unarmed) and the kind of site.
For context, the US Bureau of Labor Statistics puts the median annual wage for security guards at $38,020 in May 2025, about $18.30 an hour on a 2,080-hour year. The lowest 10% earned less than $30,210 a year and the highest 10% more than $58,840 (BLS Occupational Outlook Handbook).
Step 2: Add payroll burden
Payroll burden is what you pay on top of wages. In the US it includes:
- Employer payroll taxes: 6.2% Social Security and 1.45% Medicare, 7.65% in total, plus federal unemployment tax (6.0% on the first $7,000 of each employee's wages, reduced to 0.6% for most employers by the state credit) (IRS Publication 15).
- State unemployment insurance, at a rate your state sets for your company.
- Workers' compensation insurance, which varies widely by state and by the kind of work.
- Benefits such as paid time off, health insurance and retirement contributions.
Ask your accountant or payroll provider for your own burden as a percentage of wages, and update it every year. The example below assumes 28%.
Step 3: Count the hours and the overtime
Work out the hours the client needs each month. A post covered 24 hours a day, 7 days a week is 168 hours a week, or 728 hours a month on average (168 × 52 ÷ 12).
Then check whether your schedule creates overtime. Under the Fair Labor Standards Act, hours over 40 in a workweek are paid at one and a half times the regular rate, and some states add daily overtime. Five guards can cover a 24/7 post at around 34 hours each; four guards on a 12-hour rotation average 42 hours each, which adds overtime. Our guide to scheduling security guards for 24/7 coverage covers the options.
Step 4: Add the other costs of the contract
List everything the contract costs that is not guard wages: supervision and mobile supervisor visits, uniforms and equipment, licensing and training, vehicles and fuel for patrols, general liability insurance, software, and your share of office overheads.
Step 5: Price for your margin
Gross margin is a share of the price, not of the cost. To reach a target margin, divide the total monthly cost by one minus the margin, then divide by the monthly hours to get the bill rate.
- Monthly price = monthly cost ÷ (1 − target margin)
- Bill rate = monthly price ÷ monthly hours
A common mistake is adding 25% to the cost and calling it a 25% margin. That gives a 20% margin: on a cost of $100, a price of $125 leaves $25, which is 20% of $125.
A worked example: one 24/7 post
The figures below are assumptions for illustration. Use your own pay rates, burden and costs.
| Item | Assumption | Per month |
|---|---|---|
| Hours | 24/7, one post | 728 hours |
| Guard pay | $18.00 an hour, five guards, no overtime | $13,104.00 |
| Payroll burden | 28% of wages | $3,669.12 |
| Other contract costs | Supervision, equipment, insurance, software | $800.00 |
| Total cost | $17,573.12 | |
| Price at a 25% gross margin | $17,573.12 ÷ 0.75 | $23,430.83 |
| Bill rate | $23,430.83 ÷ 728 hours | $32.19 an hour |
If the same post ran on four guards averaging 42 hours a week, about 35 hours a month would be overtime. At $18 an hour that adds about $312 a month in overtime premium before burden, about 1.3 points of margin on this contract. That is small for one post, but it repeats on every post scheduled the same way.
Run your own figures in the free security guard cost and bid calculator, which works out hours, headcount, overtime, labour cost, the bill rate and the monthly price for a target margin.
Protect the rate after you win the contract
- Know your floor. Work out the bill rate at the lowest margin you would accept, and do not go below it to win the contract.
- Write increases into the contract. A clause that passes on minimum-wage and payroll-tax increases protects your margin over a multi-year deal.
- Agree how extra hours are billed. Hours the client asks for at short notice are usually billed at a higher rate; overtime caused by your own scheduling usually is not.
- Bill from the hours guards actually worked, and check them against the schedule every week.
Pricing and billing in ForceVera
In ForceVera, client billing builds invoices from approved guard hours. You set bill rates by guard type (unarmed, armed and off-duty police) at company, client or site level, with a weekly overtime threshold per client and holiday rates, and send PDF invoices to each client's billing contacts. Billing is included in Enterprise and is an add-on for Basic and Pro. The geofenced time clock supplies the worked hours, so what you invoice matches what was worked on site.