Free tool

HVAC Labor Rate Calculator

Enter what a technician costs, how many hours you bill, and what it takes to keep the doors open to see your break-even hourly rate and the rate to charge for the profit you want.

Your inputs

Example numbers are filled in. Start with one total for each cost, or break any of them down line by line.

1. Technician pay and hours
$
2. Costs on top of the wage

Accountants call this labor burden. It is what you pay because someone is on the payroll, beyond the paycheck.

%
%
%
$
%
$
3. Job costs you don't bill line by line

Costs of doing the work that never get their own line on an invoice. Leave out parts, equipment, and subs, since you bill those with a markup.

$
$
$
$
4. Overhead

Every cost that is not tied to a job. It is what you pay to keep the doors open whether or not a tech is on a call.

$
$
$
$
$
$
$
$
$
$
5. Profit and your rate today
%
$

Your results

Each number shows the math underneath it.

True cost per paid hour
Share of paid hours that get billed
Labor cost per billed hour
Other job costs per billed hour
Overhead per billed hour
Break-even labor rate
Rate to charge at your profit target
Your rate today vs. break-even

How the labor rate math works

An hourly labor rate has to cover what a technician costs for every hour on the payroll, the paid hours that never get billed, the job costs you don't bill line by line, and overhead, meaning every cost that isn't tied to a job. Each formula below is shown in words with the numbers you entered underneath it.

True cost per paid hour = wage × (1 + burden %)
Labor cost per billed hour = true cost × hours paid ÷ hours billed
Job costs per billed hour = job costs ÷ total hours billed
Overhead per billed hour = overhead ÷ total hours billed
Break-even rate = labor + job costs + overhead
Rate to charge = break-even rate ÷ (1 − profit %)

Profit is divided in, not multiplied on, because it's measured as a share of the price the customer pays. Adding 10% on top of a break-even rate leaves a little over 9% profit.

Tips for getting the numbers right
  • Billed hours move the rate more than anything else, so pull the real number from your dispatch or field service software instead of estimating it.
  • In Florida, workers' comp rates for HVAC work are among the highest in the country, and the costs on top of the wage commonly add 30% to 50%.
  • Count only technicians whose hours are billed. Office staff, sales, and the owner belong in overhead.
  • Flat-rate pricing still has an hourly rate underneath it, so the rate here is the one to build your price book on.
  • Commercial and prevailing wage work should be run separately, with its own wages, costs, and billed hours.
  • Parts, equipment, and subcontractors are not in this calculator, because you bill them to the customer with a markup. If that markup covers part of your overhead, the labor rate can carry less of it.

The full walkthrough is in our guide to how to calculate an HVAC labor rate. To run labor costs from your actual payroll totals, use the Labor Burden Calculator, and to price parts and equipment, use the Markup Calculator.

This calculator is for estimating only and isn't tax, legal, or pricing advice. Results depend on the information you enter.

Want these numbers to come straight from your books?

Prophet Accounting keeps the books for HVAC and other home service companies with technician costs and overhead grouped the way this calculator uses them, so your break-even rate is a number you can pull every month.

See how we work with contractors Call (772) 380-2871