HVAC Labor Rate Calculator
Do you know what your HVAC company actually needs to charge per labor hour?
Your technician's hourly wage is only one part of your actual labor cost. Payroll taxes, workers comp, benefits, paid non-working time, technician productivity and company overhead all affect the labor rate you need to charge to hit your desired net profit.
This HVAC Labor Rate Calculator uses your company's actual numbers to calculate the hourly labor rate you should use when building your flat-rate service pricing.
Service Department
Technician Burden
Available & Billable Time
Profit Target
Know Your Labor Rate. Now What?
Knowing what you need to charge per labor hour is only one piece of building profitable HVAC service pricing.
Service Margin takes your company's actual numbers and builds them into a complete HVAC Pricing Engine, including labor, parts, overhead, margins, membership discounts, payment fees and more.
Instead of figuring out how to connect all the pieces yourself, we'll build the Pricing Engine around your company and show you how to use it.
What Does Your HVAC Labor Rate Mean?
Your required service labor rate is the amount of labor revenue your company needs to produce for each billable hour. It is not simply your technician's hourly wage with a markup added to it.
A technician may earn $30 per hour, but payroll taxes, workers comp, health insurance, retirement benefits and other employee costs increase your actual technician burden.
You also can't assume every hour you pay a technician is an hour you can sell. Vacation, holidays, training, meetings, drive time, waiting on parts, callbacks and other non-billable time reduce the hours your company actually has available to sell.
That's why this HVAC Labor Rate Calculator converts your technician's annual burden into a burden per sellable hour.
Your Labor Rate Also Has to Pay Company Overhead
Technician burden is only part of your HVAC service pricing. Office payroll, vehicles, insurance, software, advertising, rent and the other costs of operating the company ultimately have to be recovered through the work you sell.
This calculator spreads annual company overhead across total sellable service hours. Technician burden per sellable hour plus overhead per sellable hour gives you your break-even labor rate.
From Break-Even to Your Labor Rate
Once technician burden and overhead are covered, you're at break-even. But breaking even isn't the goal. Your HVAC service pricing also needs to produce a profit.
The calculator uses your desired net profit to determine your Required Service Labor Rate. If that rate is $269 per hour and a condenser fan motor takes one hour to replace, you would build the repair using approximately $269 in labor, plus the motor and your appropriate parts markup.
Don't Copy Another HVAC Company's Price Book
Two HVAC companies in the same city can need completely different prices. Your technician wages, overhead, benefits, productivity and profit goals aren't necessarily the same as the company down the street.
Your HVAC flat-rate pricing should start with what your company needs to charge, not what someone else is charging.
Don't Want to Build Your Price Book From Scratch?
You can use this calculator, along with the other Service Margin resources, to build your own HVAC pricing system.
Or we can build it for you.
The Service Margin HVAC Pricing Engine is built around your company's actual costs, overhead, margins and pricing policies. Your purchase includes a 60-minute implementation and training session where we'll set it up together using your company's numbers.