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HVAC Contractor Hourly Rate Calculator

Find the hourly rate your HVAC business needs to charge to reach the income you want. Add taxes, overhead and profit margin, then see what happens to the rate if you bill fewer hours than planned.

Your goal

$
Example value. What you want to keep after taxes.
%
Optional. Example only, ask your accountant. Use 0 to skip.

Your time

Hours you charge customers for. Example: 45 hours worked but 25 billable.
52 minus vacation, holidays and sick time.

Yearly overhead (editable examples)

$
$
$
$
$
Total overhead per year$21,000
%
Extra the business keeps beyond your pay, for slow months and growth.

The values shown are examples, not benchmarks. Replace each one with your own.

Hourly rate to charge
$105.86/hour

Break-even rate (no profit margin)$95.28
Billable hours per year1,200
Gross pay needed before tax set-aside$93,333
Annual revenue needed$127,037
Profit kept by the business$12,704
($70,000 / (1 - 25%) + $21,000) / 1,200 hours / (1 - 10%) = $105.86 per hour

If you bill fewer hours

Same costs, fewer billable hours, so each hour has to earn more.

ScenarioBillable hours / yearRate needed
As planned1,200$105.86
10% fewer hours1,080$117.63
20% fewer hours960$132.33

How we calculate it

  1. Gross pay = take-home income ÷ (1 − tax set-aside)
  2. Costs to cover = gross pay + yearly overhead
  3. Billable hours = billable hours per week × weeks worked
  4. Break-even rate = costs to cover ÷ billable hours
  5. Hourly rate = break-even rate ÷ (1 − profit margin)

In one line: rate = (income ÷ (1 − tax set-aside) + overhead) ÷ billable hours ÷ (1 − profit margin).

Margin or markup: this tool applies the profit as a margin, a share of the rate you charge. The same rate as a markup on the break-even rate is margin ÷ (1 − margin), which is 11.1% for your margin. Multiplying the break-even rate by (1 + margin) instead would give a lower rate than you planned.

Billable is less than paid: in a 45-hour week with 25 billable hours, only 56% of your working time earns money directly. The rest is driving, quoting, parts runs and paperwork. This tool divides by billable hours so that time is paid for. These are examples; use your own time log.

The tax set-aside is a planning figure, not tax advice. Ask your accountant what to set aside.

How to use this tool

  1. Set your income goalEnter the take-home income you want and, if you like, a tax set-aside.
  2. Be honest about hoursUse billable hours, not hours worked, and subtract vacation and holidays from the weeks.
  3. Add overhead and marginEdit the overhead lines, set a profit margin and read your hourly rate and the revenue it needs.

Frequently asked questions

How do I work out my hourly rate as an HVAC contractor?
Start with the take-home income you want, add a tax set-aside and your yearly overhead, then divide by the hours you can actually bill. The calculator does these steps and applies the profit margin you choose, so you can see how each number moves the rate.
Why not divide by 40 hours a week?
Not every hour at work is billable. Driving, quoting, ordering parts, answering calls, paperwork and slow weeks between seasons are time customers do not pay for directly. Using billable hours instead of 40 keeps the rate from coming out too low.
What counts as overhead for an HVAC company?
Anything the business pays for whether or not you bill a job: insurance, truck costs, tools and gauges, software, phone, licenses and permits, office costs. Enter your own yearly total. The example value in the form is only a placeholder.
What if I bill fewer hours than planned?
Your costs stay the same while the hours shrink, so the rate you need goes up. Change the billable hours field and the result updates, which shows how much room you have in a slow season before the income target slips.

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