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HVAC Labor Rate Calculator
What should a small HVAC shop charge per hour?
Enter your crew, wages and overhead. You get your break-even rate and the hourly rate that pays your techs, your trucks and you — with profit left over. Built for shops with 1–5 technicians.
The other lever
Bill more of the hours you already pay for
Your field team works 5,000 hours a year. Only 3,000 end up on an invoice. Win back just 5% — less phone tag, no re-typed paper tickets, no forgotten parts — and that’s 250 more billable hours, or $30,608 a year at your rate.
Repair-CRM for HVAC
Make every billable hour land on an invoice
Field service software for small HVAC shops that run on QuickBooks Online.
- Drag a job onto a tech’s phone — no calls, no group texts
- The job timer counts billable minutes; parts and photos go on the work order
- One click turns the finished job into a QuickBooks Online invoice
No credit card · $89/mo for up to 5 users · No contract
How to calculate your HVAC labor rate
Your labor rate isn’t what you pay a tech times two. It’s what a year of running the shop costs, spread over the hours you actually invoice, plus your profit.
Labor rate = (Annual costs ÷ Billable hours) ÷ (1 − Net profit %)
Add up a year of costs
Tech wages × paid hours × (1 + payroll burden), plus your salary, plus 12 months of overhead: trucks, insurance, shop, office help, tools, marketing and software.
Divide by billable hours, not paid hours
A tech paid for 2,080 hours a year doesn’t invoice 2,080. Billable hours = people in the field × hours per week × 50 weeks × your billable %. The result is your break-even rate.
Divide by (1 − margin) for profit
For 15% net profit, divide break-even by 0.85. Multiplying by 1.15 instead is markup, not margin, and leaves you about 2 points short.
Example: labor rate for a 2-tech HVAC shop
Two techs at $28/hr working 40 paid hours a week with 25% payroll burden. An owner who pays himself $70,000 and runs calls 20 hours a week. Three trucks and $8,050 a month in total overhead. 60% of field hours are billable, and the target is 15% net profit.
| Tech wages + burden | $145,600 |
|---|---|
| Owner salary | $70,000 |
| Overhead (12 × $8,050) | $96,600 |
| Total annual cost | $312,200 |
| Billable hours (5,000 worked × 60%) | 3,000 |
| Break-even rate | $104.07/hr |
| Labor rate at 15% net profit | $122.43/hr |
Rounded up for the price list, this shop quotes $125 an hour. Now watch the billable %: at 55% the same shop needs $134; at 65% it needs only $113. For a small crew, wasted hours move the rate more than almost any cost line.
Four pricing mistakes small HVAC shops make
Pricing off the tech’s wage
“Twice what I pay him” ignores overhead, which in a 2–3 truck shop can be as big as the payroll itself.
Dividing by paid hours
Drive time, parts runs and callbacks are real hours you pay for and can’t invoice. Spread costs over billable hours only.
Leaving the owner out
If your salary isn’t in the costs, the business isn’t profitable — you’re just working for whatever is left.
Copying the competitor’s number
Their trucks, crew size and overhead aren’t yours. A rate that works for a 20-truck shop can lose money for a 3-truck one.
Get more billable hours out of the same crew
Raising your rate is one lever. The other is billing more of the hours you already pay for. In a small shop those hours leak in familiar places: phone tag to hand out jobs, paper tickets re-typed at night, a capacitor the tech used that never made it onto the invoice.
Repair-CRM is built to close those gaps. You dispatch from a drag-and-drop board, techs run the job in the technician mobile app with a built-in job timer, and the office turns the finished work order into a QuickBooks Online invoice in one click. See it on a real service call in the 2.5-minute HVAC demo, or read how it fits an HVAC business on QuickBooks.
HVAC labor rate FAQ
How much should an HVAC company charge per hour?
Enough to cover your own costs and profit target, which is why the answer differs from shop to shop. Consumer cost guides commonly put residential HVAC labor somewhere around $75 to $150 per hour, higher in big metro areas and for after-hours calls. Use that range as a sanity check, not as your price: a two-tech shop with an owner on salary spreads its overhead over far fewer billable hours than a 20-truck company, so it can need a higher rate.
How do I calculate my HVAC labor rate?
Add up a year of costs (tech wages plus payroll burden, your salary and overhead), divide by the hours you actually bill, then divide by (1 minus your net profit margin). Example: $312,200 in annual costs divided by 3,000 billable hours is a $104.07 break-even; divided by 0.85 for 15% profit, that is $122.43 per hour.
What is billable efficiency, and what should mine be?
Billable efficiency is the share of paid field hours that end up on an invoice. Driving, supply-house runs, callbacks, waiting on approvals and paperwork all count against it. There is no single official benchmark, so measure your own: add up the labor hours on two weeks of invoices and divide by the hours you paid your techs over the same two weeks.
What is labor burden for HVAC technicians?
Labor burden is what a technician costs you on top of the hourly wage: employer payroll taxes, workers' compensation, unemployment insurance, health insurance, paid time off and other benefits, expressed as a percentage of wages. Your payroll provider or accountant can give you the exact figure; this calculator starts at 25%.
Should my service call or diagnostic fee match my hourly rate?
Many shops set the diagnostic fee close to one hour of labor and credit it toward the repair if the customer approves the work. Consumer guides typically list HVAC diagnostic fees somewhere between $60 and $200. Whatever you charge, the trip costs you the same, so a fee far below your hourly rate means every "just come take a look" call loses money.
Does the labor rate include parts and equipment?
No. This is your labor rate only. Bill parts and equipment separately with your own markup; that markup is extra gross profit on top of the labor margin calculated here. Markup and margin are not the same: a 50% markup on a part is a 33% margin.
Should I use flat-rate pricing instead of an hourly rate?
Flat-rate pricing still starts from an hourly number. A flat-rate price is roughly the typical hours a task takes, times your labor rate, plus parts with markup. Get the labor rate right first, then build your price book on top of it.
How often should I recalculate my labor rate?
Whenever something big changes: you hire or lose a tech, add a truck, give raises or your insurance renews. At minimum, recalculate once a year before your busy season.
Is this HVAC labor rate calculator free? Do you store my numbers?
Yes, it is free and needs no signup. All the math runs in your browser and nothing you type is sent to Repair-CRM. The Share these numbers button puts your inputs into a link that only you hand out.