Security guard billing rates: how to build one you can defend

Security guard billing rates work best when they are built from your own costs, not copied from a competitor's quote. Start with what the officer earns, add every cost that comes with that hour, then add your overhead and your profit. The result is a rate you can explain to a client and defend at renewal.

Key points#

A bill rate is the officer's wage plus payroll costs, insurance, expected overtime, overhead and profit.
Build the rate per post, because a quiet lobby and a busy armed post do not cost the same.
Price the hours the post really needs, including relief, training and holidays.
Put wage increases and overtime terms in the contract, so a rate does not go stale.

Start with the pay rate for the post#

The pay rate is the base of everything else, so set it for the post and the market, not as a company-wide number. Licensing, armed duty, language skills, night work and client requirements can all change what you need to pay to fill the post and keep it filled.

Check what is required first. Some places and contracts set a pay floor, and union agreements can set wage steps for covered sites. If you bid without knowing about one of these, the mistake usually stays with you for the length of the contract.

Add what the law makes you pay#

Payroll taxes are a cost of every hour worked. The employer share is 6.2% for Social Security and 1.45% for Medicare, according to the IRS.

Federal unemployment tax comes next. The IRS lists it as 6.0% on the first $7,000 of each employee's wages, and the maximum credit for state unemployment tax brings it down to 0.6%, in its FUTA topic. State unemployment tax rates and wage bases vary, so use the rate your state assigned you.

Workers' compensation is another cost of every hour. Ask your broker for the rate for each type of post, because armed and unarmed work may be rated differently. Do the same with general liability and any other insurance the client's contract requires.

Count overtime honestly#

Federal law requires pay of at least one and a half times the regular rate for hours over 40 in a workweek for covered employees, under the Fair Labor Standards Act. Some states add rules of their own, so check with your state labor agency.

Overtime can hurt margin on posts that run around the clock, where weekly hours may not divide evenly across officers. Build a real schedule for the post before you price it. If the schedule shows that overtime is built in, either add officers or price the overtime into the rate. Good security guard scheduling makes this visible before you sign, not after your first payroll.

Add the hours nobody bills#

Many of the hours you pay for never appear on an invoice unless you plan for them:

Paid time off and holidays, if you offer them
Site training for new and relief officers
Pre-employment costs such as screening, licensing and uniforms
Supervisor visits and on-call management time
Replacement hours when an officer leaves

Turnover belongs in this list. Use your own records for how often officers leave and what each replacement costs you, then spread that cost across the hours you bill. Your own numbers are worth more here than any industry average.

Then add overhead and profit#

Overhead is what it costs to run the company: office staff, rent, software, vehicles, accounting and legal help. Divide your yearly overhead by the hours you expect to bill, and you have a figure to add to each hour.

Profit is a separate line. Set it on purpose, for each client, based on the risk and the effort of the account. Treating profit as whatever is left over is how a busy company ends up with little to show for its work.

Written out, the rate is simple:

Hourly pay for the post
Plus payroll taxes and insurance for that hour
Plus benefits and expected overtime, spread across the hours
Plus unbilled hours, spread the same way
Plus overhead per hour
Plus the profit you decided on

Compare it with the market, last#

Once you know your number, look at the market. If a client will only pay less, you have three honest choices: change the scope, change the hours, or walk away. Cutting the rate without changing anything else usually means cutting pay or supervision, and clients notice both.

Some buyers ask for a price before they say much about the site. A short site visit and a written proposal that lists the post hours, duties and assumptions protect you from pricing a job you have not seen.

Protect the rate in the contract#

A good rate can still go bad if the contract is weak. Before you sign a client contract, check these points:

Length and renewal: how long the rate holds and how it changes at renewal.
Mandated wage increases: whether you can pass on a required wage change during the term.
Extra hours and holidays: how you bill added coverage, short-notice requests and holiday hours.
Scope: what duties the rate covers, so added tasks become a change to the rate.
Payment terms: when invoices are due, because you pay officers long before some clients pay you.

For the legal wording, use an attorney who knows your state.

Keep checking after you win the work#

A rate is an estimate until the post has run for a while. Compare the hours you billed with the hours you paid each month, post by post. Unbilled overtime, replacement hours and added duties show up there first.

Guardix can help with this routine: invoices can be built from clocked hours, scheduled shifts or the contract, and a payroll run can be downloaded as an Excel or PDF file, so both sides of the comparison are easy to reach.

Frequently asked questions#

What goes into a security guard bill rate?#

A bill rate combines the officer's pay, payroll taxes, insurance, benefits, expected overtime, unbilled hours, overhead and profit. Build it per post, since the costs differ by site and duty.

How do I price a post that needs overtime?#

Build a real schedule first and count the weekly hours for each officer. Then either add officers to remove the overtime or include its cost in the rate. Check your state's rules as well as the federal ones.

Should I match a competitor's lower rate?#

Only if you can change the scope or the hours to match. If the work stays the same, a lower rate comes out of officer pay, supervision or your profit. Knowing your cost per hour tells you exactly where your limit is.

How often should I review billing rates?#

Review them at every renewal and whenever a wage floor, a union scale or your insurance changes. A monthly look at billed hours against paid hours will show a post that is drifting before the renewal arrives.

Sources#

IRS: Topic no. 751, Social Security and Medicare withholding rates, September 24, 2026
IRS: Topic no. 759, Form 940, Employer's Annual Federal Unemployment (FUTA) Tax Return, September 24, 2026
GovInfo: 29 U.S.C. 207, United States Code, 2023 Edition, December 31, 2023