Flat rate pricing gives the customer one price for a repair before the work starts and gives the contractor the same margin whichever technician does it. It fails when the rate is copied from a book or from the shop down the road, because then it is someone else's costs with your name on it. This page is the HVAC flat rate pricing guide from the arithmetic up, for the owner of a US HVAC contracting business: how the billing rate is built from wage, burden, overhead and profit, how a task price is built from the rate, and worked examples with the method shown. The labor rate calculator on this site does the arithmetic from your own figures.
Start with the loaded hour
A technician's wage is not what an hour costs. Add the burden: payroll taxes, workers compensation, health insurance, paid time off, training, the truck, the phone and the tools. That loaded cost per hour is the floor under every price. Most owners who price light have never worked this number; the calculator on this site works it from the wage and the burden you actually carry.
Divide overhead by billable hours, not paid hours
A technician paid for forty hours bills perhaps twenty-five: the rest is travel, restocking, callbacks and the day that did not fill. Monthly overhead, meaning the office, the insurance, the marketing and the owner's salary, has to be recovered across the billable hours actually sold. Divide by paid hours and every job carries too little overhead; that is the most common reason flat rate for HVAC work looks profitable on the ticket and is not at year end.
Profit is a line, not a remainder
Add the net profit you intend to make as a percentage of the selling price, converted correctly: divide cost by one minus the margin, do not multiply cost by one plus it. The result is the billing rate per hour. This is the rate the book is built from, and it should be reviewed whenever wages, insurance or fuel move.
From the rate to the task: HVAC flat rate pricing examples
A task price is the task's hours at the billing rate plus the parts at cost with your markup. A capacitor replacement might be a short task with a cheap part, so the price is mostly labor and the markup on the part matters less; a blower motor is a longer task with an expensive part, so the markup decides the margin. Work both in the calculator with your own figures and you will see why one markup percentage for every part is a mistake: use a sliding scale that marks cheap parts up more and expensive parts up less.
Why flat rate pricing HVAC customers accept
The customer knows the price before saying yes, the technician is not watching the clock in front of them, and a slow apprentice costs the customer the same as a fast veteran. The contractor gets a defensible number that is the same on every truck. The book is the product of the arithmetic above; the free tools here produce the rate and the task price, and the paid product keeps the book.
Questions people ask about hvac flat rate pricing
Where do I get a HVAC flat rate pricing guide?
Build it from your own costs with the method above; the arithmetic is on this site free. A purchased book is a starting point for task times, never for your rate.
What should flat rate for HVAC diagnostics be?
A separate diagnostic fee that covers the trip and the first block of time, often credited against the repair if the customer proceeds. Price it from the same loaded hour.
How often should flat rate prices change?
Review the billing rate whenever a cost input moves and at least twice a year; review task times when callbacks or technician complaints suggest they are wrong.