Security Guard Contract Pricing Calculator

How this calculator works

This calculator builds up a commercial security service contract's bill rate per guard-hour from first principles. Inputs: guard wage per hour, employer payroll burden (FICA, FUTA, SUTA, and NCCI class code 7720 workers' compensation), uniform and equipment allocation, supervisor leverage cost, target gross margin, and contract type (armed or unarmed). Outputs: fully-burdened cost per guard-hour, bill rate at target margin, gross margin per hour, the implied wage markup multiplier, and the monthly bill, cost, and margin for continuous 24/7 single-post coverage.

The calculator anchors the output against two ASIS International benchmarks — the 1.50-1.85× wage-markup band and the 8-15% gross-margin band — so the operator can sanity-check the pricing decision against industry-standard ranges before submitting a bid or accepting a renewal. The output is a contract-guard cost build-up, not a substitute for a binding cost-of-doing-business analysis from an ASIS-credentialed (CPP, PCI, PSP) cost analyst.

The framework — NAICS 561612 and ASIS economics

NAICS 561612 (Security Guards and Patrol Services) is a sub-classification of NAICS 561 Administrative and Support Services. Census Bureau Economic Census data publishes the industry's revenue, payroll, and employer-firm counts; the ratio of payroll cost to total revenue has been remarkably stable across the most recent census cycles at roughly 55-65%, which is consistent with the calculator's typical contract-guard build-up (payroll-and-burden running at 55-70% of bill rate at the 8-15% gross-margin band, the balance absorbed by uniform-and-equipment, supervisor leverage, and gross margin).

ASIS International — the largest trade association for security management professionals — publishes the dominant contract-guard pricing framework. The ASIS surveys consistently report a 1.50-1.85× markup multiplier on guard wage as the industry-typical bill rate, and an 8-15% gross-margin band as the typical contract-guard gross margin. Below the markup floor, the operation is unlikely to recover corporate G&A and sales cost; above the ceiling, the bid is unlikely to clear competitive procurement. The Security Industry Association (SIA) publishes complementary annual market-index and compensation surveys.

The build-up math is:

bill rate per hour = (guard wage + payroll burden + uniform / equipment allocation + supervisor leverage cost) / (1 minus target gross margin)

Margin is applied as a divisor, not a multiplier. A 12% gross margin produces a 1 / (1 minus 0.12) = 1.136× cost-to-revenue multiplier — not a cost × 1.12 markup. The multiplier-instead-of-divisor error is the most common DIY error in contract-guard bidding and produces bills that look profitable on the worksheet but fail to clear the actual target margin.

Inputs explained

Guard wage per hour. BLS SOC 33-9032 (Security Guards) reports a May 2024 median of $17.80 per hour. Unarmed gate guards typically run $15-$22; armed patrol officers $20-$32. State minimum-wage and prevailing-wage rules push the floor higher in CA, NY, WA, and several others; federal Service Contract Act assignments are governed by Department of Labor wage determinations and are typically above the commercial-market rate for the same county.

Employer payroll burden. Five components: FICA at 7.65% on wages under 26 USC § 3121 (Social Security 6.2% to the wage base, Medicare 1.45% uncapped); FUTA at 0.6% on the first $7,000 of wages under 26 USC § 3301-3311; SUTA at 1-6% of the first $7,000-$50,000 of wages depending on state and experience rating; workers' compensation on NCCI class code 7720 (Police, Patrol Officers, Security Guards) typically at 8.0-15.0% of payroll for unarmed work and 12-22% for armed; employer-paid benefits if any. Typical total: 18-28% for unarmed, 22-35% for armed.

Uniform / equipment allocation. Per-hour share of uniforms, badges, radios, flashlights, body-worn cameras (increasingly required by HOA and commercial clients), patrol vehicle expense for mobile patrol contracts, and consumables. Compute from annual equipment cost divided by annual guard-hours on the contract. Typical $0.50-$2.50 unarmed, $1.50-$5.00 armed.

Supervisor leverage cost. Industry-standard span of control is one supervisor per 30-50 guards. The supervisor's fully-loaded cost (salary, payroll burden, vehicle allowance, communications, travel) is divided by the supervisor's annual guard-hour span. Typical $1.00-$3.00 per guard-hour for shared-span supervision; $2.00-$4.00 for dedicated supervision on premium accounts.

Target gross margin. ASIS benchmark is 8-15%. Gross margin must absorb corporate G&A (4-8% of revenue), sales and account-acquisition cost (2-4%), bad-debt reserve (0.5-1.5%), and corporate-level insurance (1-2%) before any net profit is recognized.

Contract type. Armed contracts attract an additional general liability and professional liability premium uplift; the calculator folds this into the effective payroll burden.

Industry benchmarks

The ASIS contract-guard benchmarks, the SIA market-index data, and the NAICS 561612 Census Economic Census revenue-and-payroll ratios converge on a consistent picture:

• Markup multiplier. 1.50-1.85× guard wage is the industry-typical bill-rate band. Outliers below typically indicate a high-volume federal Service Contract Act bid where predictable volume and procurement discipline justify the lower margin; outliers above typically indicate specialty armed, executive-protection, or premium-account work where the cost basis carries additional training, certification, or carrier-uplift load.

• Gross margin. 8-15% is the ASIS benchmark. The most commonly cited single value in industry surveys is 10-12%. Operations reporting net margin above 5-7% on contract-guard revenue are typically also operating a higher-margin investigation, executive-protection, or technical-services line and blending the average; the pure contract-guard line rarely supports net margin above the low single digits.

• 24/7 single-post coverage. Continuous coverage of one post requires 168 hours per week — the equivalent of 4.2 FTE guards in the naive math, 4.3-4.5 FTEs once vacation, sick, training, and holiday relief are layered in. The calculator computes monthly billing at the 168 × 4.33 weeks = 727.44 hours per month figure.

• Workers compensation rate. NCCI class code 7720 rates run 8.0-15.0% of payroll for unarmed work and 12-22% for armed. The state filed rate, the operation's experience modification, and the National Council on Compensation Insurance assigned-risk plan participation all materially affect the actual loaded cost; the calculator uses a typical-midpoint figure for the armed-contract uplift.

• Supervisor span. One supervisor per 30-50 guards is industry-standard. Operations running tighter spans (one per 15-25 guards) typically also run higher-margin specialty work and the supervisor cost loads more heavily on the bill rate.

What this calculator does NOT model

• Multi-shift FLSA overtime. The calculator produces a single bill rate per guard-hour against a single wage input. Federal FLSA (29 USC § 201 et seq.) requires overtime at 1.5× for hours over 40 in a workweek; many state-specific contracts (CA in particular) pay daily-cycle overtime at 1.5× for hours over 8 in a single shift and at 2.0× for hours over 12.

• Federal Service Contract Act (SCA) prevailing-wage compliance. SCA work under 41 USC chapter 67 is governed by Department of Labor county-level wage determinations and a fringe-benefit obligation. The calculator can be used for SCA cost build-ups by entering the SCA wage as the guard-wage input, but the calculator does not enforce the SCA wage determination lookup.

• State guard licensing fees. Most states license private security guards (CA BSIS, FL Class D / G, TX DPS, NY DOS, others). Licensing fees, training cost, and license-renewal cost are typically loaded into the uniform-and-equipment per-hour line.

• Multi-account corporate G&A allocation. Contract gross margin must absorb corporate-level G&A, sales, and bad-debt cost before net. The calculator computes gross margin, not net.

• Bid-and-renewal pricing strategy. Contract pricing carries strategic considerations (market positioning, account-acquisition cost amortization, renewal economics) that the calculator does not model.

• Travel and reimbursable expense pass-through. Patrol contracts with reimbursable mileage, fuel, or vehicle-replacement reserves are billed separately on a pass-through basis; the calculator handles only the per-guard-hour bill rate.

• Single-event vs continuing contract pricing. Special-event security carries different unit economics from continuing post coverage; the calculator targets the continuing-contract use case.

Sources

• BLS SOC 33-9032 — Security Guards. Occupational Employment and Wage Statistics, May 2024 release. Median hourly wage $17.80; full distribution and geographic breakouts at the BLS OEWS publication.

• NAICS 561612 — Security Guards and Patrol Services. Census Bureau industry classification; Economic Census revenue, payroll, and employer-firm data published on the five-year cycle.

• 26 USC § 3121. FICA tax base; payroll-burden framework for the Social Security and Medicare components of employer payroll cost.

• 26 USC § 3301-3311. FUTA framework; payroll-burden component for federal unemployment insurance.

• 29 USC § 201 et seq. Fair Labor Standards Act; minimum wage and overtime framework. Most state guard contracts treat contract guards as non-exempt; daily-cycle and weekly-cycle overtime obligations vary by state.

• 29 CFR 1910. OSHA general industry workplace safety; informs the NCCI class code 7720 workers'-compensation premium load.

• NCCI class code 7720. National Council on Compensation Insurance classification for Police, Patrol Officers, and Security Guards; state filed rates and experience modification drive the workers'-compensation component of payroll burden.

• ASIS International. Trade association for security management professionals; publisher of the contract-guard cost-of-doing-business benchmarks, the 1.50-1.85× wage markup band, the 8-15% gross-margin band, and the CPP, PCI, and PSP credentialing programs underlying the cost-analyst profession.

• Security Industry Association (SIA). Manufacturers, integrators, and service providers; publisher of the annual SIA Security Market Index and industry compensation surveys.

• 41 USC chapter 67 — McNamara-O'Hara Service Contract Act. Federal prevailing-wage and fringe-benefit framework for service contracts with the federal government, including contract-guard services.

Last reviewed: 2026-05-17 against the sources above. The BLS SOC 33-9032 wage data is refreshed annually in the May OEWS release. The ASIS and SIA benchmark surveys are refreshed annually. NCCI class code 7720 rates are refreshed at state-by-state filing intervals (typically annual).