HVAC pricing guide: how to price HVAC jobs
Almost every pricing problem in a small HVAC shop traces back to one of four numbers: what an hour of tech time actually costs, what overhead you have to recover, what you charge for parts, and what margin you’re aiming at. Get those four right and the price of any job falls out of them. This guide works each one with real arithmetic, then shows what to do with the answers.
Number 1: your loaded cost per billable hour
Not the wage. The wage is roughly two-thirds of what a tech costs you, and it’s spread across fewer hours than you think. Take a $28/hour tech:
- Wage: $28 × 2,080 clocked hours = $58,200/year.
- Payroll taxes, workers comp, benefits:about 28% on top ≈ $16,300. Running total: $74,500.
- Truck, fuel, tools, phone: roughly $9,000/year. Total cost of that tech: $83,500.
- Billable hours:PTO, training, shop time, and unsold call-backs eat into 2,080. Say 1,850 hours end up on tickets. $83,500 ÷ 1,850 = $45/billable hour.
That last line is where shops get hurt, and it’s worth staring at. If the same tech only bills 1,500 hours, he costs $56 an hour, not $45 — a 24% jump in the cost basis under every price in your book. Flat rate helps here, because task times include drive and setup, so more of the clock is genuinely billable. But you have to use your real number, not the optimistic one. The free HVAC labor rate calculator does this arithmetic with your wages, burden, and billable hours, and shows your break-even floor alongside it.
Number 2: the overhead you have to recover
Overhead is everything that doesn’t ride in a van: rent, the office phone, software subscriptions, general liability, advertising, accounting, and whatever the owner pays themselves for the hours spent not turning wrenches. It gets recovered as a multiplier on direct cost.
Work out the multiplier from last year’s books: total overhead ÷ total direct job cost. A shop with $180,000 of overhead and $720,000 of direct labor and materials gets 0.25, so every job’s direct cost gets multiplied by 1.25 before margin is added. Most 1-to-4 truck shops land between 1.20 and 1.35. If you have never calculated it, 1.25 is a defensible placeholder — but calculate it before your next price review, because guessing low here is invisible and expensive.
Number 3: what you charge for parts
Parts pricing needs its own rule, because a flat multiple fails at both ends of the range. Double a $6 capacitor and you’ve made $6 — less than the cost of the trip to the supply house to get it. Double a $2,400 coil and you’ve priced yourself out of the job. Tiered markup fixes both: high multiples on cheap parts, tapering as the part cost climbs. The tiers, with a chart you can copy, are in the HVAC parts markup guide.
One habit worth building: record the cost of every part in the price book, not just the sell price. Cost is what lets you check a margin later. In one real 86-item HVAC book we audited, 83 items had no cost recorded at all, so the shop had no way to know that a compressor task was selling at a negative 20 percent margin. On the 3 items that did carry cost, the undercharge came to $71,888 a year from just the 3 items that had cost data, at 12 sales each per year —
the item-by-item working is here.
Number 4: your target margin
Margin is the decision, not the outcome. Pick it deliberately: 55 to 65 percent gross on service tasks is where healthy residential shops sit, and the formula is price = (direct cost × overhead factor) ÷ (1 − margin). Here’s what the choice is worth on one repair — a condenser fan motor, 1.5 hours at $45 loaded labor plus a $120 part, so $187.50 direct and $234 after the 1.25 overhead factor.
Pricing the three kinds of HVAC work
The four numbers stay the same; how you apply them changes with the work.
- Service and repair: flat rate, priced per task in a book. The scope repeats, so pricing it once is the whole win. The per-task formula, worked on five common repairs, is in the HVAC flat rate pricing guide.
- Equipment installs: quoted per job from a costed template — equipment, sheet metal, electrical, permit, crane or lift if needed, crew hours. Expect 35 to 45 percent gross rather than 60, and offer good/better/best so the customer chooses a tier instead of choosing whether to call someone else.
- Maintenance agreements:priced on the visits they consume plus the repair work they reliably surface. A tune-up visit is about an hour and a half of loaded labor, so an agreement priced under roughly $150 a year is a loss leader. Fine, as long as it’s a decision.
The diagnostic fee decision
Your truck roll costs money whether or not the visit sells work. A $89 to $129 diagnostic covers it. Free diagnostics aren’t free — the no-sale calls get paid for by the customers who do buy, which means your repair prices have to carry a hidden surcharge you never sized. If you credit the diagnostic toward an approved repair, build that credit into the repair prices before you offer it.
Right prices go stale
A price book is correct on the day you build it and drifts every day after. Wages rise, insurance renews higher, and supply houses reprice without telling you. The fix is a calendar item, not a heroic project: review the full book once a year, spot-check any task whose part cost has moved more than 10 percent, and raise prices in small regular steps rather than one alarming jump. If the raise itself is what you’re worried about, that’s covered in how to raise HVAC prices without losing customers.
If your book lives in Housecall Pro, you can see the drift in a few minutes: export it and run the export through the free Margin Leak Finder, which flags every line item priced below your target margin. It runs in your browser and your file never leaves your machine.
Where PriceTuneup fits
None of the above requires software. The calculators on this site are free and account-free, and the math works fine in a spreadsheet. What software is genuinely good at is upkeep at scale: reapplying your margin rules to a few hundred tasks when your labor cost changes, and catching the items that quietly slipped underwater.
If you’d rather have the book fixed than diagnosed, the done-for-you rebuild is $249 one time: we reprice your entire Housecall Pro book at your target margins and hand back import-verified files you own. Ongoing software continuity afterward is optional at $299/yr. The rebuild is backed by the 60-Day Ticket-Lift Guarantee: If your average ticket doesn't go up within 60 days of importing your new price book, we refund the full price — and you keep every file. The rest of the pricing guides go deeper on each number above.
Frequently asked questions
How do you price an HVAC job?
Price it from cost upward, in four steps: work out your loaded labor cost per billable hour, add the part at your marked-up price, multiply by your overhead factor to recover rent and office costs, then divide by (1 minus your target margin) to get the price. Do that once per task, write the result in the price book, and quote from the book instead of doing the math in the driveway.
What should my HVAC labor rate be?
There are two rates and shops confuse them constantly. The one you build prices from is your loaded cost per billable hour — $45 to $60 for a $28/hr tech, depending on how many hours actually bill. The one the customer effectively pays, after overhead and a 55 to 65 percent target margin, lands most residential shops between $120 and $180 per billable hour.
What is a good profit margin for an HVAC company?
Target 55 to 65 percent gross margin on service and repair tasks, 35 to 45 percent on equipment installs, and 8 to 15 percent net profit for the business overall. Installs carry a lower margin percentage because the equipment cost dominates — the dollars per job are much larger, which is why both numbers can be healthy at once.
Should I charge an HVAC diagnostic fee?
Yes — charge for the diagnostic, and decide deliberately whether you credit it toward the repair. A $89 to $129 diagnostic covers the truck roll on the calls that don't turn into work, which is what makes free-diagnostic pricing so dangerous for a small shop: the no-sale visits are paid for by the customers who do buy. Crediting it against an approved repair is a fine sales tool as long as the repair prices in your book were built with that discount in mind.
How often should I update HVAC prices?
Review the whole book once a year and spot-update any task whose part cost moved by more than about 10 percent. Motors, boards, and refrigerant have all jumped 5 to 15 percent inside single years recently, and a book still priced on three-year-old supply-house costs gives that difference away on every ticket.
Should HVAC installs be priced from the same price book as repairs?
No — repairs belong in a flat-rate book, installs belong in a costed quote template. Repair tasks repeat closely enough that one book price fits nearly every occurrence, while installs vary by equipment, duct condition, electrical, permits, and access. The margin math is identical; only the unit changes, from per-task to per-job.
Start with number one
Every price in your book sits on your loaded cost per billable hour. Work out yours in about two minutes with the free calculator — wages, burden, truck, and the hours you really bill. When you’re ready to reprice the whole book against it, PriceTuneup does that for $249, one time.