Landscaping Margin: Why a 50% Route Earns 27%

Landscaping is priced by the visit or the route, so a maintenance account can look like a 50% job on the estimate. The margin that reaches the bottom line is usually far lower, because the biggest costs in this business, the truck moving between sites, the equipment wearing out, and the crew you keep on through winter, rarely get charged to the specific route that consumed them.

The 50% that becomes 27%

Leak 1: fully-burdened crew labor (8 to 12 points)

Estimates use the base crew wage. The real cost adds 20 to 35% of burden, and landscaping workers-comp class rates run high because grounds work is hazardous (Aspire). Start from the BLS median of about $18/hr for landscaping and groundskeeping workers (SOC 37-3011, BLS OEWS), load 20 to 35%, and the true hourly cost is well above the wage on the estimate.

Leak 2: non-billable drive and windshield time (5 to 8 points)

The crew is paid to drive between sites, and no client account pays for that hour. It disappears into overhead. Route research puts the loss at roughly 10 to 15% of productive capacity (Aspire). On a route with several stops a day, that is a real slice of paid labor producing zero revenue.

Leak 3: equipment and fuel per crew-hour (3 to 5 points)

Mowers, trailers, blowers, and fuel are almost always booked as annual overhead rather than charged per crew-hour to the route. Equipment also loses roughly 20 to 30% of its value in the first year (directional). When you allocate an equipment-and-fuel cost per crew-hour to the route, the route's real margin drops again.

Leak 4: off-season idle labor (2 to 4 points)

In seasonal markets you pay wages through a slow winter to keep crews you cannot afford to lose. That is a full-year labor cost spread over a partial-year revenue base, and it is why industry net profit for landscaping lands around 17% (Lawn & Landscape) despite estimate margins that look far higher.

Add the four and a 50% estimate margin lands near 27% in the business, and around 17% net after overhead.

How to rebuild your route margin

1. Start from the quoted margin on a representative route (say 50%).
2. Re-cost the labor: base crew wage times 1.20 to 1.35 for burden. Recompute the route.
3. Charge drive time: estimate daily windshield minutes per crew, convert to annual hours, price at the loaded crew rate, and spread across routes.
4. Add equipment and fuel per crew-hour, and subtract the AR carry on net-30 commercial contracts (days to collect divided by 365, times cost of capital, times revenue).

The gap between the estimate margin and the rebuilt margin is the money that leaks out of routes that looked profitable.

Why this is directional

The 50-to-27 figure illustrates the mechanism; it is not a measured survey of your book. The input costs (burden range, windshield-time share, wage anchor, industry net margin) are cited to named sources; the exact points depend on your route density, equipment, and seasonality. The lesson is the same: charge drive time and equipment to the route, or the route will look more profitable than it is.

Related reading:

• The Level Index: landscaping benchmarks
• Gross profit per hour: the complete guide
• Contractor finance KPIs ranked by profit impact