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Methodology

Travel Charge Recovery Planner methodology

Combine travel time, loaded labour, distance, vehicle cost and fixed travel cost to set an ex-tax travel charge that protects your target margin.

Educational only: Business decision support, not accounting, tax or legal advice.

Privacy: Calculations run locally; Margin101 does not receive your commercial inputs.

Update policy: Reviewed when formulas or official dependencies change.

Scope: Market-neutral small-business planning using your own assumptions.

1. Formulas and units

Travel cost
travelCostExTax = travel hours ร— loaded labour rate + distance ร— vehicle cost + fixed travel cost

Where

travelHours
Travel hours (hours/job)Source: Business record
loadedLabourRateExTax
Loaded labour cost per hour (currency units/hour, ex tax)Source: Business record
distanceKm
Travel distance (consistent distance units/job)Source: Business record
vehicleCostPerKmExTax
Vehicle cost per distance unit (currency units/distance unit, ex tax)Source: Business record
fixedTravelCostExTax
Fixed travel cost (currency units/job, ex tax)Source: Business record
travelCostExTax
Travel cost (currency units, ex tax)Source: Calculated output
Required travel charge
requiredTravelChargeExTax = travel cost รท (1 โˆ’ target margin)

Where

targetMargin
Target travel margin (decimal fraction of travel-charge revenue)Source: User assumption
travelCostExTax
Travel cost (currency units, ex tax)Source: Calculated output
requiredTravelChargeExTax
Required travel charge (currency units, ex tax)Source: Calculated output
Travel contribution
contributionExTax = required travel charge โˆ’ travel cost

Where

travelCostExTax
Travel cost (currency units, ex tax)Source: Calculated output
requiredTravelChargeExTax
Required travel charge (currency units, ex tax)Source: Calculated output
contributionExTax
Travel contribution (currency units, ex tax)Source: Calculated output

Money inputs and outputs use the currency selected in the scenario without changing the canonical methodology. Rates, margins, utilisation and buffers are entered as percentages and converted to decimal values for calculation.

2. Worked example

Input assumptions

The rows below come directly from the exact engine using the visible default fixture.

Travel hours
2 hours/job
Loaded labour cost per hour
60 currency units/hour, ex tax
Travel distance
100 consistent distance units/job
Vehicle cost per distance unit
0.8 currency units/distance unit, ex tax
Fixed travel cost
0 currency units/job, ex tax
Target travel margin
0.2 decimal fraction of travel-charge revenue

Calculation and outputs

  1. Travel cost

    travelCostExTax = travel hours ร— loaded labour rate + distance ร— vehicle cost + fixed travel cost
    Travel hours
    2 hours/job
    Loaded labour cost per hour
    60 currency units/hour, ex tax
    Travel distance
    100 consistent distance units/job
    Vehicle cost per distance unit
    0.8 currency units/distance unit, ex tax
    Fixed travel cost
    0 currency units/job, ex tax
    Target travel margin
    0.2 decimal fraction of travel-charge revenue
    Required travel charge
    250 currency units, ex tax
    Travel contribution
    50 currency units, ex tax

    Engine result: 200 currency units, ex tax

  2. Required travel charge

    requiredTravelChargeExTax = travel cost รท (1 โˆ’ target margin)
    Travel hours
    2 hours/job
    Loaded labour cost per hour
    60 currency units/hour, ex tax
    Travel distance
    100 consistent distance units/job
    Vehicle cost per distance unit
    0.8 currency units/distance unit, ex tax
    Fixed travel cost
    0 currency units/job, ex tax
    Target travel margin
    0.2 decimal fraction of travel-charge revenue
    Travel cost
    200 currency units, ex tax
    Travel contribution
    50 currency units, ex tax

    Engine result: 250 currency units, ex tax

  3. Travel contribution

    contributionExTax = required travel charge โˆ’ travel cost
    Travel hours
    2 hours/job
    Loaded labour cost per hour
    60 currency units/hour, ex tax
    Travel distance
    100 consistent distance units/job
    Vehicle cost per distance unit
    0.8 currency units/distance unit, ex tax
    Fixed travel cost
    0 currency units/job, ex tax
    Target travel margin
    0.2 decimal fraction of travel-charge revenue
    Travel cost
    200 currency units, ex tax
    Required travel charge
    250 currency units, ex tax

    Engine result: 50 currency units, ex tax

Example

The rows below come directly from the exact engine using the visible default fixture.

Travel cost
200.00
Required travel charge
250.00
Travel contribution
50.00

The exact engine-derived outputs are shown in the labelled rows below.

Interpretation

Keep travel time, distance and call-out recovery separate enough to explain the customer charge.

3. Validation and boundary checks

  • All values must be finite and remain inside the visible input boundaries.
  • All money values use one consistent ex-tax basis and period.
  • Rates must remain inside their engine-owned boundaries.
Travel hours minimum
travelHours โ‰ฅ 0 hours/job โ€” A lower value is rejected before calculation.
Travel hours maximum
travelHours โ‰ค 100,000,000 hours/job โ€” A higher value is rejected before calculation.
Loaded labour cost per hour minimum
loadedLabourRateExTax โ‰ฅ 0 currency units/hour, ex tax โ€” A lower value is rejected before calculation.
Loaded labour cost per hour maximum
loadedLabourRateExTax โ‰ค 10,000,000 currency units/hour, ex tax โ€” A higher value is rejected before calculation.
Travel distance minimum
distanceKm โ‰ฅ 0 consistent distance units/job โ€” A lower value is rejected before calculation.
Travel distance maximum
distanceKm โ‰ค 100,000,000 consistent distance units/job โ€” A higher value is rejected before calculation.
Vehicle cost per distance unit minimum
vehicleCostPerKmExTax โ‰ฅ 0 currency units/distance unit, ex tax โ€” A lower value is rejected before calculation.
Vehicle cost per distance unit maximum
vehicleCostPerKmExTax โ‰ค 10,000,000 currency units/distance unit, ex tax โ€” A higher value is rejected before calculation.
Fixed travel cost minimum
fixedTravelCostExTax โ‰ฅ 0 currency units/job, ex tax โ€” A lower value is rejected before calculation.
Fixed travel cost maximum
fixedTravelCostExTax โ‰ค 10,000,000 currency units/job, ex tax โ€” A higher value is rejected before calculation.
Target travel margin minimum
targetMargin โ‰ฅ 0 decimal fraction of travel-charge revenue โ€” A lower value is rejected before calculation.
Target travel margin maximum
targetMargin โ‰ค 0.99 decimal fraction of travel-charge revenue โ€” A higher value is rejected before calculation.

4. Assumptions and source classification

  • All hours, utilisation, costs, rates and recovery targets are supplied by the user.
  • Money values use one consistent ex-tax basis.
  • No provider fee, jurisdiction, benchmark or demand forecast is embedded.
  • Raw engine precision is retained until display.

This planner has no current policy-data dependency. Its commercial assumptions are user supplied. Registered family-level regression suites exercise the shared business-logic engine and worked-result reconciliation.

5. Limitations

  • Results depend on the completeness and classification of the entered business records.
  • The planner does not forecast demand, utilisation, supplier terms or project outcomes.
  • This is educational business decision support rather than accounting, tax, legal or financial advice.
  • The entered labour, distance and vehicle costs are internal commercial assumptions; the planner does not apply a statutory mileage, reimbursement, award or tax rate.

This is educational decision support, not tax, accounting, legal or financial advice. Check the treatment of your actual transactions under the rules that apply to your business and seek qualified advice where appropriate.

6. Update and evidence policy

Registered family-level suites test formula invariants and example reconciliation; the release ledger records that coverage without claiming a separate oracle for every line of public copy. There is no official threshold or benchmark to refresh for this planner. Commercial inputs remain user-supplied because they vary by business and contract.

Change history

  1. : Initial public release of the planner and methodology after pre-launch calculation, content, source and interaction review.

Guides to interpret the decision and its assumptions.

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