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HVAC

HVAC Labour Rate Calculator

Your billable rate has to carry three things: what the tech costs you, what the business costs to run, and the profit you want left over. This works out all three.

Your numbers

$
%
Payroll taxes, workers' comp, insurance, benefits, paid time off, on top of the wage.
$
Everything not directly on a job: office, admin wages, software, marketing, insurance, vehicles.
techs
hrs
Not hours worked, hours you actually invoice. 1,300–1,600 is common once drive time, training and slow weeks are removed.
%

Result

Hourly rate to charge $106.37
True cost per billable hour $85.10 Burdened wage plus overhead
Burdened wage $42.24
Overhead per billable hour $42.86
A tech on $32 an hour actually costs you $85.10 per billable hour once burden and overhead are carried. Charge $106.37 to hold a 20% margin.

Billable hours is the number that moves this rate most. If your techs bill 1,100 hours instead of 1,400, your true cost per hour rises sharply, measure it before trusting the output.

Run the missed call calculator

What moves the number

  • Billable hours per technician per year, which is the denominator everything else divides by.
  • Burden on the wage, which for an HVAC classification is substantial.
  • Annual overhead, recovered across sold hours rather than calendar hours.

Where this one goes wrong

Setting the rate from what the shop down the road charges. Their rate reflects their overhead, their technician count and their utilisation. Matching it is how a company stays busy and unprofitable.

Before you quote

  • Hours actually invoiced last year, not hours worked.
  • Whether overhead includes the owner's own unpaid time.
  • Whether install and service should carry different rates.

Questions

About this calculator

What is labour burden?

Everything you pay on top of the wage: payroll taxes, workers' compensation, liability insurance, health cover, retirement contributions, paid holiday and training time. Thirty per cent or more is common in the trades.

Why are billable hours so much lower than hours worked?

A tech paid for 2,080 hours a year spends a large share of them driving, restocking, training, waiting and on unbilled callbacks. Charging as if every paid hour is billable is how contractors quietly run at a loss.

Does this work for flat-rate pricing?

Yes. Calculate the rate here, then multiply it by the standard hours in your flat-rate book to set the labour portion of each task price.

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How to use this calculator

  1. Technician hourly wage ($). Enter your own figure; the page starts at $32.
  2. Labour burden (%). Payroll taxes, workers' comp, insurance, benefits, paid time off, on top of the wage.
  3. Annual overhead ($). Everything not directly on a job: office, admin wages, software, marketing, insurance, vehicles.
  4. Number of field technicians (techs). Enter your own figure; the page starts at 4 techs.
  5. Billable hours per tech per year (hrs). Not hours worked, hours you actually invoice. 1,300–1,600 is common once drive time, training and slow weeks are removed.
  6. Target net margin (%). Enter your own figure; the page starts at 20%.

The result updates as you type, so you can try a figure, see what it does to hourly rate to charge, and change it back. Nothing you enter is sent anywhere or saved.

A worked example

These are the figures the calculator opens with. Every number in the results column below is produced by the same calculation the page runs, so you can follow it through before putting your own figures in.

What goes in

InputValue
Technician hourly wage$32
Labour burden32%
Annual overhead$240,000
Number of field technicians4 techs
Billable hours per tech per year1,400 hrs
Target net margin20%

What comes out

ResultValue
Hourly rate to charge main result$106.37
True cost per billable hour$85.10
Burdened wage$42.24
Overhead per billable hour$42.86

A tech on $32 an hour actually costs you $85.10 per billable hour once burden and overhead are carried. Charge $106.37 to hold a 20% margin.

How sensitive the answer is

Holding everything else steady and changing only technician hourly wage, this is what happens to hourly rate to charge. It is worth knowing which of your inputs the answer actually hinges on, and which barely move it.

Technician hourly wage ($)Hourly rate to charge
$16 $79.97
$24 $93.17
$32 example above $106.37
$48 $132.77
$64 $159.17

Every other input is held at the example value while this one changes, which is not how a real job behaves. Treat it as a guide to which number matters most, not as five separate quotes.

What each figure means

Technician hourly wage ($)
A money amount, starting at $32.
Labour burden (%)
Payroll taxes, workers' comp, insurance, benefits, paid time off, on top of the wage.
Annual overhead ($)
Everything not directly on a job: office, admin wages, software, marketing, insurance, vehicles.
Number of field technicians (techs)
Measured in techs, between 1 and 500, starting at 4 techs.
Billable hours per tech per year (hrs)
Not hours worked, hours you actually invoice. 1,300–1,600 is common once drive time, training and slow weeks are removed.
Target net margin (%)
A percentage, between 0 and 90, starting at 20%.

What the results tell you

ResultWhat it is
Hourly rate to chargeThe headline result. A money figure.
True cost per billable hourA money figure.
Burdened wageA money figure.
Overhead per billable hourA money figure.

Before you rely on this number

Sizing, capacity and load figures here are planning estimates. A real installation depends on the manufacturer's data for the specific equipment, the duct system it is going into, and a proper load calculation for the building. Use this to sanity-check a number or price a job, not to select equipment.

More billable hours beats a higher rate

Unanswered calls and no-show appointments are lost billable hours. See what they cost you.