HVAC
HVAC Markup Calculator
Apply a markup to job cost and see the margin that markup actually produces.
Result
Equipment usually carries a lower markup than parts because the dollar value is large and customers can price-check it online. Parts and labour are where margin is actually made.
Get a Free Business AuditWhat moves the number
- What is included in the cost being marked up: parts only, or parts plus labour plus overhead.
- Different markups for equipment, parts and labour, which carry different risk.
- Warranty exposure, which markup has to cover.
Where this one goes wrong
Marking up equipment at the same rate as parts. Equipment is a large number where a percentage produces a figure customers will question, while small parts need a much higher multiplier to cover handling.
Questions
About this calculator
What markup gives a 40 percent margin?
About 67 percent. The two are different measures and using the same number for both under prices every job by a wide margin.
Should equipment and parts carry the same markup?
Rarely. A percentage that is reasonable on a small part produces an indefensible number on a condenser, and one that suits equipment recovers nothing on a capacitor.
Does flat rate pricing avoid this?
Only if the flat rate book was built with the margin calculated correctly. Flat rate hides the arithmetic from the customer, not from your accounts.
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How to use this calculator
- Equipment cost ($). Enter your own figure; the page starts at $2,800.
- Markup on equipment (%). Enter your own figure; the page starts at 35%.
- Parts and materials cost ($). Enter your own figure; the page starts at $620.
- Markup on parts (%). Enter your own figure; the page starts at 60%.
- Labour hours. Enter your own figure; the page starts at 12.
- Labour rate charged per hour ($). Enter your own figure; the page starts at $125.
The result updates as you type, so you can try a figure, see what it does to total price, 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
| Input | Value |
|---|---|
| Equipment cost | $2,800 |
| Markup on equipment | 35% |
| Parts and materials cost | $620 |
| Markup on parts | 60% |
| Labour hours | 12 |
| Labour rate charged per hour | $125 |
| Your labour cost per hour | $62 |
What comes out
| Result | Value |
|---|---|
| Total price main result | $6,272 |
| Gross profit | $2,108 |
| Gross margin | 33.61% |
| Total cost | $4,164 |
This job prices at $6,272 against $4,164 of cost, $2,108 of gross profit at a 33.61% margin.
How sensitive the answer is
Holding everything else steady and changing only equipment cost, this is what happens to total price. It is worth knowing which of your inputs the answer actually hinges on, and which barely move it.
| Equipment cost ($) | Total price |
|---|---|
| $1,400 | $4,382 |
| $2,100 | $5,327 |
| $2,800 example above | $6,272 |
| $4,200 | $8,162 |
| $5,600 | $10,052 |
Every other input is held at the example value while this one changes, which is not how a real job behaves. Treat it as a guide to which number matters most, not as five separate quotes.
What each figure means
- Equipment cost ($)
- A money amount, starting at $2,800.
- Markup on equipment (%)
- A percentage, between 0 and 300, starting at 35%.
- Parts and materials cost ($)
- A money amount, starting at $620.
- Markup on parts (%)
- A percentage, between 0 and 400, starting at 60%.
- Labour hours
- A number, between 0 and 500, starting at 12.
- Labour rate charged per hour ($)
- A money amount, starting at $125.
- Your labour cost per hour ($)
- A money amount, starting at $62.
What the results tell you
| Result | What it is |
|---|---|
| Total price | The headline result. A money figure. |
| Gross profit | A money figure. |
| Gross margin | A percentage. |
| Total cost | A 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.
Keep going
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