How to Price HVAC Jobs

You're pricing three businesses, not one

Every HVAC business sells at least three things, and they behave completely differently. Pricing them off one hourly rate is how a business ends up busy and thin at the same time.

Notice what changes between them. On a service call, most of your cost is spent before you know what the job is. On an install, most of it is committed the moment you order the equipment. On maintenance, you control the timing, which is worth real money in a trade this seasonal.

The rate underneath all three

Whatever pricing model you land on, it has to be built off a charge-out rate that covers your own costs. Our guide to working out your charge-out rate covers the calculation — target income, genuinely chargeable hours, overheads, margin. It applies here unchanged, including the difference between markup and margin, which is where a lot of HVAC pricing quietly leaks.

What's specific to HVAC is what goes in the overhead column. These are the costs that don't appear on any one job but have to be recovered across all of them:

Pricing service and repair

The defining fact about a service call is that the expensive part happens before anyone knows what the job is. You've driven there, got the gauges on and worked out what's wrong — and none of that is optional, whether the fix is a $40 capacitor or a new system.

1. Charge properly for turning up. A call-out or minimum charge that genuinely covers travel, diagnosis and write-up, applied whether or not the repair proceeds. Our guide to callout fees covers how to set it.
2. Diagnose on the clock, then quote the fix. Hourly for the part nobody can scope, a firm price for the repair once you know what it is. That combination is covered in flat rate vs hourly, and it suits reactive HVAC work better than either model on its own.
3. Build flat prices for the repairs you do constantly. Capacitor, contactor, fan motor, control board, regas after leak repair, condensate pump. You've done each of them enough times to know the real time — price them once and stop re-quoting the same work.
4. Set your parts margin and hold it. Decide it as a margin, not a markup, and apply it consistently. Sourcing, stocking, warranty handling and the trip to the wholesaler are all real costs that the part's invoice price doesn't include.
5. Price the second visit. A part that has to be ordered means a second trip. Either price it into the repair or quote it as its own line — what you can't do is absorb it and call the job profitable.

Installs: price the site, not the box

The single most damaging habit in HVAC pricing is quoting off the equipment. Customers can look up what a unit costs, so a price built visibly on the box invites a negotiation about the box — a comparison you can't win against a retailer who isn't installing anything.

Everything that decides whether an install makes money is on the site, not in the carton:

• Pipe run length and route — through a roof space, around a corner, up a second storey, or the easy ten metres.
• Access — single storey with a clear yard versus a tile roof, a lift, scaffold, or a body corporate with rules.
• Electrical work — whether there's a spare circuit and capacity, or a switchboard conversation.
• Condensate — where the water goes, and whether that's a gravity run or a pump.
• Core drilling and making good — brick, double brick, concrete, or heritage anything.
• Decommissioning — recovering refrigerant from the old system and disposing of it properly.
• Structural and trade coordination — brackets, penetrations, patching, and whoever else has to be there.

1. Keep two margins, not one. An equipment margin and a labour margin, set separately. Blending them hides the fact that a job heavy on equipment and light on labour can look big and earn very little.
2. Quote from a site visit on anything non-trivial. A phone quote on a ducted job is a guess with your money behind it. The visit is also where you find the work the customer never mentioned.
3. Itemise the hard parts. Access, electrical upgrades, long runs and core drilling shown as their own lines. That's what makes a dearer quote comprehensible next to a cheaper one that assumed none of it.
4. State what's excluded. Switchboard upgrades, asbestos, structural work, making good beyond the penetration. Anything you'd have to stop for belongs in writing before you start.
5. Put a validity date on it. Equipment pricing and availability both move, particularly heading into summer. A quote with no expiry is an open offer to hold today's supplier price indefinitely.

For the line-by-line build-up on a specific job, see quoting split system air conditioning and quoting ducted air conditioning. This guide is about the model those quotes are built from.

Recurring work, and holding your prices through the season

Maintenance agreements are the closest thing this trade has to a fix for its own seasonality. They're scheduled when you choose, priced on a visit you can time accurately, and they turn every install into future work. What a maintenance agreement is and what to charge covers how to price and sell one.

The pricing discipline that goes with a seasonal trade is less obvious, and it costs people money in both directions:

• Don't discount in the peak. When you're booked three weeks out, price is not what's losing you jobs. Discounting in January just fills capacity you were going to fill anyway, at less.
• Don't chase volume below cost in the shoulder. A quiet April is a reason to sell maintenance and ring your install list about heating, not a reason to take work that loses money.
• Use the quiet months to review pricing, not the busy ones. Your annual pricing review will not happen in December.
• Watch what the peak actually earned. Rushed jobs, overtime, expedited supply and callbacks all cost more than a normal week, and a busy month can convert to less profit than a steady one.

Then check the model against reality. Cost your finished jobs — quoted against actual, equipment and labour separately — and look at each price line on its own. It's common to find installs carrying the business while service calls run at break-even, or the reverse, and you can only fix what you can see.

Frequently asked questions