HVAC Flat Rate Pricing: Build a Price Book on Sellable Hours

What is HVAC flat rate pricing?

HVAC flat rate pricing quotes a fixed price per repair task, taken from a price book, before the work starts. The customer sees the price up front; the shop carries the risk that the task runs long. Behind every flat price is the same hourly cost maths, done once per task instead of once per invoice.

Flat rate = (task hours x loaded labour rate + parts + task hours x overhead per hour) / (1 - margin)

Overhead in that formula is spread per sellable hour: an hour a technician spends on a task a customer pays for. That one word is where most homemade price books go wrong, and it is the subject of the next sections.

I'm not an HVAC technician; I build pricing math. Every wage, part cost and task time below is an assumption you replace with your payroll, your distributor invoices and your own timed jobs.

HVAC pricing calculator: price one task

Enter the task hours, parts and your cost inputs; the calculator returns break-even first, then the flat rate. The defaults are the capacitor entry worked below.

Two boxes need care. The wage box is the real hourly wage you pay ($30 here). "Days you bill" means sellable days: set it so that days x 8 equals the hours each tech actually sells, so 1,200 sellable hours is 150 in the days box. And the overhead box should include the wages paid for unsold hours (next section). The general free job pricing calculator runs the same maths for any trade.

Why flat rates must be built on sellable hours, not paid hours

A technician is paid for every hour on the clock but only some of those hours are sold: drive time, parts runs, callbacks, training and slow days are paid and unbilled. Flat rates built on paid hours spread your costs over hours nobody buys, so every entry comes out too low.

Here is the arithmetic with assumed figures. A tech paid $30 an hour for 2,080 hours sells 1,200 of them (for example 240 working days with 5 sold hours a day). The other 880 hours still cost the loaded wage: (2,080 - 1,200) x $30 x 1.32 = $34,848 a year per tech. That is an overhead cost, like the van. For a two-truck shop with $108,000 of other yearly overhead, total overhead is $108,000 + 2 x $34,848 = $177,696.

Divide it by sellable hours, not paid hours: $177,696 / (2 x 1,200) = $74.04 per sold hour. The paid-hours version leaves the unsold wages out and divides $108,000 by 4,160 paid hours, giving $25.96. Build the capacitor entry that way and you get this:

That entry sells at $159.27. The true cost of the task, on sold hours, is $143.64, so the shop keeps $15.63 on the job: a real margin of about 9.8%, not 40%. The formula was right; the hours under it were wrong. Measure your own sold-hour ratio from timesheets and invoices before you trust any price book.

Worked example: one HVAC flat-rate price book entry

Price a price-book entry by timing the task, costing it at the loaded wage, adding overhead per sold hour and parts at your cost, and dividing by (1 - margin). Take a run capacitor replacement with an assumed 1 hour of task time and $30 of parts.

1. Loaded labour: $30 x (1 + 32% burden) = $39.60. Burden covers payroll tax, workers' comp and insurance; see the labor burden calculator guide for your own figure.
2. Overhead: $177,696 / (2 techs x 150 x 8) = $74.04 per sold hour, unsold wages included.
3. Break-even: $39.60 + $30.00 + $74.04 = $143.64.
4. Flat rate: $143.64 / (1 - 0.40) = $239.40.

The margin is an assumption too. Pick yours from what the business needs to fund after costs; the overhead and profit calculator guide shows how overhead and profit differ.

HVAC flat rate price book: a sample built with the formula

A price book is the worked example repeated for every task you sell. Using the same inputs ($39.60 loaded labour and $74.04 overhead per sold hour, 40% margin), here are seven entries. Task hours and part costs are placeholders to show the method, not market prices.

Each row is (hours x 113.64 + parts) / 0.6, where 113.64 is labour plus overhead per sold hour. Change one input on the settings tab and every row reprices. Time each task across several real jobs, including setup, testing and cleanup, before a row goes in front of a customer.

How much should I charge for an HVAC service call?

Charge at least the cost of the shortest real visit, priced on margin. Every call carries drive time and a first stretch of diagnosis whether the fix takes ten minutes or an hour.

With the inputs above, a visit of 0.5 hours driving plus 1 hour of diagnosis and no parts breaks even at $170.46 and prices at $284.10 at 40% margin. Some shops charge that as a diagnostic fee and then quote the repair from the price book; others build the trip into each entry. Either way the drive has to be paid for somewhere.

What do HVAC techs charge per hour?

Derive it rather than copy it. Loaded labour plus overhead here is $39.60 + $74.04 = $113.64 per sold hour, so the hourly rate that matches a 40% margin is 113.64 / 0.6 = $189.40. The same shop working from paid hours, with unsold wages left out of overhead, would calculate $65.56 of cost and a rate near $109.27, and lose money on every hour. Your wage, burden, overhead and sold-hour ratio set your number.

Pricing a system replacement, and the markup mistake

Price replacements with the same formula; the stakes just grow. Here two techs spend 10 hours each and the equipment and materials allowance is a $5,500 placeholder, standing in for your distributor quote. The margin is set at 30% to show that big-ticket work can carry a different margin from repairs.

Break-even is $7,772.80 and the price at 30% margin is $11,104.00. Add 30% as a markup instead and you quote $10,104.64, which keeps only 23.08% and gives up $999.36 on one job. The markup vs margin guide has the conversion chart.

How much does a new HVAC system cost for 2,000 sq ft? That depends on the load calculation, the equipment chosen, duct condition and local labour costs, so I won't quote a market range. For your own quote: size the equipment, get the distributor price, estimate crew-hours from past installs, and run it through the formula above.

HVAC flat rate price book in Excel: formulas

Build the price book as one row per task (name, hours, parts) with break-even and price formulas that read from a settings tab. Change the wage or overhead once and every row updates.

Lock the settings cells with absolute references such as Settings!$B$2 so each task row stays a single line you can copy down. The layout mirrors the electrical pricing guide, which prices a pricebook the same way for another service trade.

Flat-rate pricing app vs a spreadsheet price book

Flat-rate apps and field-service software suit shops that want the price book on a tablet with good-better-best options, dispatch and on-site payments. A spreadsheet price book suits a one- to three-truck shop that wants to own the maths, see every formula and pay once. Some apps sell pre-built task times; whatever the source, check those times against your own jobs.

What to put in your price book: a settings tab (wage, burden, paid hours, sellable hours, overhead including unsold wages, techs, margin, service-call minimum); one row per task with hours, parts, break-even and price; and a column for the date each task time was last checked.

There is no ready-made HVAC template in the shop. Free options: the free Job Pricing Starter spreadsheet and the calculator above. Built for you: the done-for-you custom job-pricing calculator is tailored to your trade, with your labour tasks, materials and rates pre-loaded, a branded client quote page and a job log with win-rate dashboard, delivered in Excel and Google Sheets in about 2-3 business days. It is $497 one-time, with one round of revisions. If you would rather see the price book built first, the custom HVAC pricing calculator page shows what the build includes.

Step-by-step: HVAC Flat Rate Pricing: Build a Price Book on Sellable Hours

1. Find sellable hours per tech. From timesheets and invoices, count hours actually sold in a year. 240 days x 5 sold hours = 1,200.
2. Cost unsold hours as overhead. (Paid hours - sellable hours) x wage x (1 + burden). (2,080 - 1,200) x $30 x 1.32 = $34,848 per tech.
3. Find overhead per sold hour. Yearly overhead including unsold wages / total sellable hours. $177,696 / 2,400 = $74.04.
4. Time each task. Record real task hours, including setup, testing and cleanup, across several jobs before setting a flat rate.
5. Compute break-even per task. Task hours x (loaded rate + overhead per hour) + parts at your cost.
6. Price on margin. Divide break-even by (1 - margin). Never multiply by (1 + margin); that is a markup and keeps less.
7. Set a service-call minimum. Price the shortest real visit, drive plus diagnosis, the same way. Bill at least that on any stand-alone call.

Related guides