How to Price Security Guard Services

How to set a bill rate that actually covers your costs and earns a margin — the pay-rate vs bill-rate spread, what moves the number, and the mistakes that sink new companies.

Price your security services too high and you lose bids; too low and you win contracts that lose money. Setting the bill rate right is one of the most important skills in running a guard company — and one of the most commonly botched. This guide covers how to build a rate from your real costs and the mistakes to avoid.

This is general business guidance, not financial advice. Your actual numbers depend on your market, your costs, and your contracts.

Short answer

Build your bill rate from the ground up: the officer's pay, plus every cost of employing them, plus overhead, plus margin. The gap between what you pay the officer and what you bill the client — the spread — has to cover far more than most new owners realize.

Bill rate vs pay rate

There are two numbers in this business: the pay rate (what the officer earns per hour) and the bill rate (what you charge the client per hour). New owners often set the bill rate by adding a small markup to the pay rate — and quietly go broke, because the spread has to absorb far more than profit.

What the spread has to cover

Everything between pay rate and bill rate funds the real cost of putting that officer on post:

Payroll taxes — the employer's share on top of wages.
Insurance — general liability and workers' compensation.
Uniforms and equipment — gear, devices, vehicles for patrol.
Overhead — office, admin, licensing, software, supervision.
Recruiting and training — an ongoing cost given industry turnover.
Margin — what's left, and the reason you're in business.

Add these up honestly before setting a markup. The bill rate has to clear all of it — not just the wage plus a few dollars.

What changes the rate

Armed vs unarmed — armed officers command higher pay and more liability, so a higher rate.
Skill and risk — specialized or high-risk posts pay more.
Hours and overtime — coverage that pushes into overtime costs you more; price it in.
Location and market — local wage norms and competition set the band.
Contract size and term — larger or longer commitments may justify a slightly lower rate.

Common pricing mistakes

Marking up the wage alone — forgetting taxes, insurance, and overhead.
Ignoring overtime — a single post covered 24/7 needs more than one full-time officer once you account for time off.
Underbidding to win — buying a contract you'll lose money servicing.
Never revisiting rates — wages and costs rise; rates have to keep up.

How you charge

Most guard service is billed hourly per officer, but you'll also see flat monthly rates for fixed coverage and per-post pricing. Whatever the structure, it has to resolve back to covering your fully-loaded cost per hour with margin on top. Knowing your true cost per billed hour is the single most useful number in the business.

Frequently asked questions

How do security companies set their rates? By building up from the officer's pay rate to a bill rate that covers payroll taxes, insurance, equipment, overhead, recruiting, and margin — not by adding a small markup to the wage.

What's the difference between pay rate and bill rate? The pay rate is what the officer earns; the bill rate is what you charge the client. The spread between them funds all the costs of employing and supervising that officer, plus your profit.

Why do new security companies fail on pricing? Usually by underbidding — setting a bill rate that doesn't cover the fully-loaded cost of an officer once taxes, insurance, overhead, and overtime are included.