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- Price = (loaded labor + parts) ÷ (1 − overhead − profit). At 35% overhead and 10% profit that is cost ÷ 0.55, an 82% markup.
- A tech at the BLS median wage of $29.33 costs about $66 per billable hour once benefits, payroll taxes and unbilled time are counted.
- That puts the labor rate to quote near $120 an hour. Thumbtack tells homeowners to expect $60 to $70.
- ACCA's 2025 contractor study: average net profit 6%, flat rate shops 7%, everyone else 4%. Its line for healthy growth is 10%.
- Skip adding your percentages to cost. A 45% markup at 35% overhead loses $58 on every $1,000 of cost.
- Price book software prints $39 to $99 per tech a month, and one free plan covers 500 tasks.
Here is how to price HVAC jobs so each one makes money: add the loaded labor and the parts, then divide by the share of the price left after overhead and profit. At 35% overhead and a 10% profit that divisor is 0.55, which works out to an 82% markup on cost.
This guide is for the owner with one to ten trucks who prices from memory, a competitor's menu or a markup someone handed down. Every figure was read at its source on November 14, 2026. The calculator below takes your own numbers.
How to price HVAC jobs: one formula, four inputs
The formula fits on a sticky note. Price equals direct cost divided by one minus your overhead share and your profit share. Direct cost is the labor and the parts that go into this one job and no other.
- Labor hours. Time on the job itself, taken from your own invoices.
- Loaded labor cost. What one billable hour of a tech costs you with taxes, benefits and unbilled time inside it. The wage is only the start.
- Materials. What you pay the supply house for the parts and equipment.
- Two percentages. Overhead as a share of revenue, plus the net profit you want to keep.
Set your own numbers in the calculator below. Each default is sourced in the note under its slider. The two job buttons load a capacitor swap and a blower motor, using the part prices and job times This Old House publishes.
At the defaults, a half-hour capacitor swap with a $45 part prices at $142. Contractors on Housecall Pro charged $136 to $295 for that job across a year of invoices. So a shop paying the median wage and quoting the formula price lands near the bottom of the market, with room above it.
The rest of this guide is where each input comes from, and how to turn the formula into a price book your techs can quote from in a driveway.
A $29.33 tech costs you about $66 per billable hour
Start with the wage. The Bureau of Labor Statistics (BLS) publishes pay for heating, air conditioning and refrigeration mechanics and installers, and a contractor survey gives a second reading.
- Median wage: $29.33 an hour, or $61,010 a year (BLS, May 2025).
- Lowest tenth: under $40,050 a year. Highest tenth: over $95,210.
- Median at plumbing, heating and air conditioning contractors: $60,030 a year.
- Average tech wage reported by contractors: about $33 an hour, from the 2025 Contractor of the Future Study.
That study comes from the Air Conditioning Contractors of America (ACCA), the trade association, and Farmington Consulting Group. It surveyed more than 1,000 contractors. The full report goes to ACCA members, so the figures here come from coverage in Contracting Business and PHC Pros.
What rides on every wage dollar
BLS also publishes what employers pay on top of wages. For installation, maintenance and repair occupations in June 2026, every wage dollar carried another 46 cents of benefits and required taxes.
| Employer cost | Per wage dollar | On a $29.33 wage |
|---|---|---|
| Wage | $1.00 | $29.33 |
| Health and other insurance | 12.7 cents | $3.73 |
| Required taxes and workers' comp | 11.3 cents | $3.32 |
| Paid leave | 9.8 cents | $2.87 |
| Retirement | 6.4 cents | $1.88 |
| Supplemental pay (overtime, bonuses) | 5.6 cents | $1.65 |
| Loaded hour | $1.46 | $42.77 |
We scaled the BLS median wage by the bureau's own employer cost ratios to get that table. Rows are rounded to the cent. Your own mix will differ, and a shop with no health plan sits lower.
The required slice starts with payroll tax. The IRS sets the employer's share at 6.2% for Social Security and 1.45% for Medicare. Federal unemployment tax adds 0.6% on the first $7,000 of each employee's pay after the usual state credit. State unemployment and workers' comp make up the rest.
The hours nobody pays you for
A loaded hour is still not a billable hour, meaning one a customer pays for. Field Promax tracked 300 HVAC companies and found techs bill 5.7 hours of an 8.8-hour paid day, about 65%.
ACHR News carried that report in June 2026. Drive time that no trip charge recovers took 1.13 hours a day. Paperwork, idle gaps and training took about two more.
Other sources bracket the number. ServiceTitan's guide calls 65% to 75% average and 85% or better excellent. ACCA puts the ceiling near 91% once holidays, training and drive time come out.
Divide the $42.77 loaded hour by a 65% billable share and one billable hour of a median-wage tech costs about $66. That is 2.2 times the wage, before a truck, a phone or a dollar of profit.
ACCA's own figure points the same way. Its October 2025 post puts the average cost to roll a truck near $84.40 an hour with the vehicle and insurance included.
The HVAC labor rate that cost implies
At 35% overhead and 10% profit, a $66 hour has to sell for $120. That is your HVAC labor rate, the hourly figure buried inside every flat price you quote.
Published consumer guides sit on both sides of it. Thumbtack tells homeowners that HVAC specialists charge $60 to $70 an hour. This Old House and Housecall Pro both print $75 to $150.
Read the Thumbtack figure again. The hourly rate a homeowner is told to expect is roughly what the tech's hour costs you before overhead. A shop that matches it covers the tech and nothing else.
Overhead and profit set the divisor
Overhead is every cost that is not tied to one job. The Small Business Administration's break-even guide calls these fixed costs and names rent, insurance and depreciation among them.
To get your number, add up twelve months of those costs from the P&L, your profit and loss statement, and divide by revenue for the same months. ServiceTitan's July 2026 guide prints these ranges as shares of revenue, with no sample named:
- Office and admin payroll: 6% to 12%
- Marketing and lead generation: 5% to 10%
- Owner pay and draws: 3% to 10%
- Trucks: 3% to 7%
- Insurance: 2% to 5%
- Rent and facilities: 1% to 4%
- Software: 1% to 3%
Net profit is what remains after direct cost and overhead, owner pay included. The published benchmarks do not agree, so here they are side by side.
| Benchmark | Figure | Published by |
|---|---|---|
| Overhead, residential service and replacement | 30% to 45% of revenue | ServiceTitan, July 2026 |
| Overhead per billable hour | $40 to $50 | ACCA, October 2025 |
| Average net profit | 6% | ACCA study, 2025 |
| Net profit needed for sustainable growth | 10% | ACCA study, 2025 |
| Average net profit | 8% to 12% | Housecall Pro, April 2026 |
| Healthy net profit | 10% to 20% | ServiceTitan, July 2026 |
| Our defaults | 35% overhead and 10% net profit, until your own P&L says otherwise | |
The two averages conflict. The ACCA study surveyed more than 1,000 contractors and found 6%. Housecall Pro's profit guide says 8% to 12% and names no sample, so we weight the survey.
ACCA also prices overhead a second way, as dollars per billable hour. Its post says the figure typically runs $40 to $50 and has you stack it with labor and an hourly profit target. That method loads overhead onto labor-heavy jobs. The percentage method loads it onto parts-heavy jobs.
For a shop with one overhead number, the percentage is simpler, and it is what the calculator uses. Check big equipment jobs against the hourly method before you quote them. A third of an expensive condenser is a lot of overhead to hang on one afternoon.
Break-even in billable hours
The SBA's break-even formula is fixed costs divided by price minus variable cost. At a $120 rate and a $66 labor cost, each billable hour leaves $54 toward overhead. Divide your monthly overhead by 54 to see how many hours you must bill before the first dollar of profit.
Priced right, but the board has holes?
A price book only pays on the jobs you win. Skill Mammoth builds websites and runs marketing for contractors and home service businesses.
HVAC markup is not margin, and the gap eats the profit
Markup is profit as a share of cost. Margin is profit as a share of price. Overhead and net profit are both shares of the price, so both are margins, and that is why the formula divides.
The common slip is to add the two percentages to cost as a markup. Here is the same job priced both ways, at 35% overhead and a 10% profit goal.
| On $1,000 of direct cost | Add 45% as markup | Divide by 0.55 |
|---|---|---|
| Quote | $1,450 | $1,818 |
| Overhead at 35% of the quote | $508 | $636 |
| Net profit | $58 loss | $182 |
| Net margin | Minus 4% | 10% |
The slip turns a $182 profit into a $58 loss on work you did well. Our markup vs margin guide has the full conversion table. The short rule is to divide by what is left and never multiply by what you want.
The average markup explains the average profit
The ACCA study reported that the average dealer markup rose from 67% to 72%. Contracting Business, which covered the findings in December 2025, does not say whether that applies to equipment, labor or both.
Convert it anyway. A 72% markup is a 41.9% gross margin, which is the share of the price left after direct cost. Subtract 35% for overhead and 6.9% remains.
The study's average net profit was 6%. We ran that check ourselves: 0.72 divided by 1.72, minus the 35% overhead used in the calculator. The average shop's markup and the average shop's profit are one fact stated twice.
| Your overhead | Divisor for 10% net | Markup on cost you need |
|---|---|---|
| 30% of revenue | 0.60 | 67% |
| 35% of revenue | 0.55 | 82% |
| 40% of revenue | 0.50 | 100% |
| 45% of revenue | 0.45 | 122% |
| The average 72% markup | Reaches 10% net only if overhead stays under 32% | |
Vendor guides print very different parts markups. Jobber's guide says 25% to 50% on equipment and 100% or more on small parts. ServiceTitan's October 2026 template page says three to six times cost on parts and materials.
Neither replaces your own divisor. A sliding scale that marks cheap parts up more and expensive equipment less is fine, as long as the blend across a month of jobs still clears your overhead and your profit.
HVAC flat rate pricing beats time and materials on service calls
HVAC flat rate pricing gives the customer one price for a defined job before work starts, however long it takes. Time and materials, or T&M, bills the hours worked plus parts at a markup.
The ACCA study found flat rate is the most common way to price service, used by 56% of contractors. Shops using it on service calls averaged 7% net profit, against 4% for every other method.
average net profit for contractors who flat rate their service calls, against those who price another way. ACCA and Farmington Consulting Group, 2025 study of more than 1,000 contractors.
The hourly math explains the gap. You need about $120 an hour, and the homeowner has read that techs charge $60 to $70. A flat price moves the conversation from your hourly rate to the repair.
Flat rate also pays you for speed. Housecall Pro's guide points out that a tech who finishes early keeps the full price, while T&M shrinks the invoice as your crew gets faster.
| Job | Method | Why |
|---|---|---|
| Diagnostics, repairs and tune-ups | Flat rate | Repeatable tasks with known times |
| Equipment replacement | Flat rate, several options | Scope is known after the visit |
| Unfamiliar equipment or unclear scope | Time and materials | No reliable time estimate exists |
| Commercial accounts | Client rate sheet | The contract sets labor rate and markup |
| Verdict | Flat rate by default, T&M for the unknowns | |
Housecall Pro's guide keeps T&M for work a shop has not done before. ServiceTitan's says commercial clients get their own rate sheets in place of the residential book.
On replacements, offer choices. In the ACCA study, contractors who presented four or more options closed 52% of jobs, against 42% for those showing one to three. Only one in ten did it.
Build a price book from your 20 most common tasks
A price book is the list of every task you sell with its flat price. ServiceTitan's August 2026 guide says to start with your top 20 to 50 tasks, not the whole catalog.
- Set the cost of a billable hour. Use the labor section above with your own wages and your own billable share.
- Pull the task list. Export a year of invoices and count. Start with the 20 jobs you do most.
- Time each task. Use your own job records, and price for the average tech on your crew.
- Price each one. Hours times labor cost, plus the part at supply house cost, divided by your divisor.
- Add modifiers. ServiceTitan lists attic or crawlspace access, rooftop work and after-hours calls.
- Set the diagnostic fee. This is the charge to come out and find the problem. Contractors on Housecall Pro charge $85 to $125 for a residential diagnostic.
- Reprice every year. Housecall Pro's guide says a rate book needs an update at least once a year as parts and wages move.
If you sell maintenance agreements, build the member discount into the book. ServiceTitan notes that contractors commonly give members 10% or 15% off, and recommends building that discount into your baseline prices. Our HVAC service agreement template has the terms.
What price book software prints for price
You can build the book in a spreadsheet. Software adds pre-built task lists and parts prices that update. Three vendors print a per-tech price, and two of the big field service platforms print none.
Housecall Pro prices by company. Its flat rate pricing starts on the Essentials plan at $149 a month billed annually, or $189 month to month, with five users. Our Housecall Pro pricing breakdown covers the other plans.
Profit Rhino's page says coaching and implementation are required and prints no fee for them, so ask before you compare. Aptora's Flat Rate Plus Online has the only free plan we found. For the wider field, see our HVAC estimating software comparison.
HVAC pricing guide: what homeowners already expect to pay
Your customer has looked up the price before you arrive. This is the HVAC pricing guide they read, set beside what contractors on Housecall Pro charged across 3.6 million logged service entries.
| Job | Contractors charge (Housecall Pro) | Thumbtack tells homeowners | This Old House tells homeowners |
|---|---|---|---|
| Diagnostic visit | $85 to $125 | $69 average | $75 to $150 |
| Capacitor replacement | $136 to $295 | $179 to $250 | $80 to $400 |
| Blower motor replacement | $341 to $978 | $400 to $1,300 | $170 to $2,400 motor, plus labor |
| AC tune-up | $89 to $159 | $79 to $189 | $70 to $200 |
| Replacement | $5,500 to $11,965 (4-ton split AC) | $2,063 to $8,667 (existing AC unit) | $8,138 to $17,511 (system, by size) |
| Hourly labor | $75 to $150 | $60 to $70 | $75 to $150 |
Housecall Pro's job prices come from customer invoices for the 12 months ending September 2026, and its hourly range is third-party data. The Thumbtack pages were updated in June and July 2026. The This Old House pages were updated between March and August 2026.
Thumbtack's average to replace an existing AC unit is $4,230. That is below the $5,500 low end of what Housecall Pro's contractors charge for a 4-ton split system. A homeowner who read Thumbtack first will think a fair quote is high.
The repair lines tell a kinder story. On capacitors, blower motors and tune-ups, what contractors charge sits inside the ranges homeowners are shown. Service work is where a cost-based price book meets the least resistance.
They look it up in the week you are busiest
We pulled 12 months of Google search data for 14 HVAC price questions on November 14, 2026. Pick a search in the tool below and switch to the month view to see its year.
Six air conditioning price searches drew 103,500 searches in July against 15,500 in December, a 6.7 times swing. We got that by adding the monthly counts for the six AC keywords in the tool.
Single repairs swing harder. Capacitor replacement cost ran 27,100 searches in July and again in August, against 2,900 the November before. Furnace ignitor cost fell from 4,400 in January to 90 in August.
Advertisers already pay for these readers. The average Google Ads click on "ac repair cost" was $38.45, and on "ac tune up cost" it was $36.07.
The pricing lesson is timing. The week your board is full is the week the most homeowners hold a published range next to your quote. Price to your costs and print what is included, because the range they read does not know your overhead.
Three pricing moves to skip
- Matching a published hourly rate. Thumbtack's $60 to $70 is your cost per billable hour at the median wage, with nothing left for the truck.
- The cheap service call as a loss leader. ACCA's example is an $89 call against an $84.40 truck hour, which leaves $4.60.
- One markup for every job. A percentage that works on a $45 capacitor overloads a condenser, and one that suits a condenser starves the service department.
All three come from pricing against someone else's number. The formula only works with your wage, your billable share and your overhead in it.
When the price is right and the phone is quiet
Pricing fixes what each job earns. It cannot create jobs. The same ACCA study found the average contractor spends 6% of revenue on marketing, and shops spending at least 12% reported 9% net profit against 5% for the rest.
That is a correlation from a survey, so treat it as a reason to look and not as a budget. Put marketing in your overhead number first. Then decide where it goes with our HVAC marketing plan and the channel ranking in how to get HVAC leads.
Skill Mammoth builds websites and runs marketing for contractors and home service businesses. Plans start at $350 a month, and a website build is $3,000 or $150 a month for 24 months. If your prices are right and the calendar has gaps, that is the part we can help with.
Want more calls at the prices you just set?
We build the website and run the marketing that fills an HVAC schedule. Plans start at $350 a month.
Frequently asked questions
How do you price an HVAC job?
Add the labor hours times your loaded labor cost to what the parts cost you, then divide by one minus your overhead and profit shares. At 35% overhead and a 10% net profit the divisor is 0.55. A job with $78 of direct cost prices at $142. Dividing matters: adding 45% to cost as a markup would quote $113 and lose money.
What is a good profit margin for an HVAC company?
ACCA and Farmington Consulting Group's 2025 study of more than 1,000 contractors found an average net profit of 6% and called 10% the line needed for sustainable growth. ServiceTitan's July 2026 guide calls 10% to 20% healthy. Contractors who flat rate their service calls averaged 7% in the ACCA study, against 4% for other pricing methods.
What should an HVAC company charge per hour?
Enough to cover the full cost of a billable hour, plus overhead and profit. At the BLS median wage of $29.33, a tech costs about $66 per billable hour after benefits, payroll taxes and unbilled time. At 35% overhead and 10% profit that hour sells for about $120. This Old House and Housecall Pro both print $75 to $150 an hour for HVAC labor.
What is the average markup on HVAC parts and equipment?
The ACCA study reported an average dealer markup of 72%, up from 67%. Vendor guides vary widely: Jobber says 25% to 50% on equipment and 100% or more on small parts, while ServiceTitan says three to six times cost on parts and materials. A 72% markup is a 41.9% gross margin, which reaches 10% net profit only if overhead stays under 32%.
Is flat rate pricing better than time and materials for HVAC?
For service calls, the survey data says yes. In the ACCA study, 56% of contractors priced service by flat rate, and those shops averaged 7% net profit against 4% for other methods. Flat rate also keeps your hourly rate out of the conversation. Time and materials still fits unfamiliar equipment and jobs with no clear scope, where no reliable time estimate exists.
How much does an HVAC service call cost?
Contractors on Housecall Pro charged $85 to $125 for a residential diagnostic visit in the 12 months ending September 2026. Thumbtack tells homeowners the inspection fee averages $69, and This Old House prints $75 to $150. The repair is extra: Thumbtack puts the national average HVAC repair at $191 to $842, and the ACCA contractor study put the average service ticket at $422.