Security guard pricing: setting your bill rate

Most owners can say what they pay a guard. Far fewer can say what a billed hour costs them. Security guard pricing lives in that gap, and it is why a busy, well reviewed, growing company still misses payroll in a slow February.

What does an hour of guard time actually cost you?

Four layers, and each one sits on the one below it.

The wage

The starting point, and the only number most people know. The Bureau of Labor Statistics puts median security guard pay at $18.29 an hour as of May 2025, and its state and metro estimates will place your market against that. What you actually pay is set locally, and rates by market covers that in detail.

The burden

Everything you owe because that person is an employee. Some of it is fixed by statute and you can look it up.

• Employer FICA. The IRS sets the employer share at 6.2 percent for Social Security and 1.45 percent for Medicare, so 7.65 percent, with Social Security capped at the annual wage base and Medicare uncapped.
• Federal unemployment. The FUTA rate is 6.0 percent on the first $7,000 of each employee's wages, with a credit of up to 5.4 percent for state unemployment tax paid, which brings the effective rate to 0.6 percent when the full credit applies. High turnover means you pay that $7,000 base over and over on new hires instead of once.
• State unemployment. Rate varies by state and by your own experience rating.
• Workers' compensation. The largest and most variable line in security. It is priced off your class code, your state and your claims history, so get your actual rate from your carrier rather than borrowing a range. How guard company workers' comp is priced covers what moves it.
• Benefits, if you offer any.

Added up, operators generally plan on burden adding somewhere in the region of 25 to 40 percent on top of the wage. Calculate yours. That range is wide enough to be the difference between a profitable contract and a loss.

The overhead allocation

Office, management salaries, general liability insurance, vehicles, uniforms, software, recruiting, unbilled training time, and the supervisor who drives between four sites all night. Divide total annual overhead by total annual billable hours and you have a per-hour number. It is usually larger than people guess.

The margin

What is left. A company priced to break even is one bad month from a crisis, and in this business the bad month is a client who pays in ninety days while your payroll runs weekly.

What does the arithmetic actually look like?

Run it for your three biggest contracts this week. One of them will surprise you.

Where does each revenue dollar go?

The breakdown below is illustrative rather than survey data, but the shape is right: labor dominates, and the profit slice is thin enough that a single cost line moving a few points swallows it.

Look at the relationship between overtime and net profit. In an operation shaped like this one, overtime is a larger share of cost than profit is, which means controlling overtime moves the bottom line faster than winning another contract at the same margin.

How do you pick a billing model?

Three structures cover almost everything.

Hourly is the default and the easiest to defend. You bill hours worked, the client pays for hours received, and disputes come down to whether the hours are provable. That makes accurate, verifiable timekeeping a pricing issue as much as a payroll one.

Fixed monthly buys the client predictability and buys you risk. Everything that varies now comes out of your margin: callout overtime, supervisor visits, training hours, holiday coverage. Scope it from a full year of actual hours on a comparable site, not from the schedule, and put the overage terms in writing. The place to do that is your service agreement.

Per service fits discrete work where the value is not proportional to the hours: an event, an alarm response, a site assessment. Eight guards for four hours at a venue is not simply 32 hours at your standard rate, and pricing it that way leaves money on the table in both directions.

What should change the price?

A daytime lobby post and an overnight armed patrol in a rough industrial park are different products. One rate card for both is a decision to lose money on one of them.

How do you compete without cutting the rate?

The lowest bidder wins the contract and then discovers why the price was low. Missed shifts, a revolving roster, a guard who is present but not working. Clients who have been through that once will pay a premium to avoid a second time, and that premium is your opening.

Three things make the case, in ascending order of usefulness.

1. Appearance and training. Turned-out officers and documented training beyond the state minimum tell a prospect something before anyone performs.
2. Reliability with evidence. Fill rate, response time, tenure on their site. Bring the numbers to the renewal rather than asserting the adjective.
3. Verifiable work. GPS-tracked patrols, an NFC or QR checkpoint scan that proves the guard stood at the point rather than drove past it, incident reports carrying a photo, a location and a timestamp, and a route that exports its own completion record. That last one is the difference between telling a client the patrol happened and showing them, checkpoint by checkpoint, the next morning.

The third one is what actually shifts a price conversation, because it turns your service into something the client can audit. More on that in winning contracts on technology and reporting that wins renewals.

When should you walk away?

Some business belongs to a competitor who has not done this arithmetic.

Saying no is a pricing decision. It is also the one that protects the rate you charge everyone else, because the account you take at a loss becomes the reference price the next prospect asks you to match.