If your service department is busy but the numbers never stack up, this is usually why.
Most HVAC service pricing is built on the wrong foundation.
Not bad work.
Not lazy techs.
Not lack of jobs.
Bad pricing logic.
The Core Problem With Service Pricing
Most service pricing is done one of three ways:
- Flat call-out + parts
- Parts markup + time estimate
- “That’s what we’ve always charged”
None of those start with the true cost of time.
And in service, time is the product.
Service Is Not Install
Install pricing works differently:
- Fixed scope
- Known labour
- Known materials
- Predictable time
Service is:
- Variable
- Unpredictable
- Time-heavy
- Full of non-billable hours
If you price service like install, you’ll lose money.
The Big Truth No One Talks About
You pay techs for hours worked.
Customers only pay for hours billed.
That gap is where service departments leak money.
What Actually Happens in a Service Day
A tech’s day includes:
- Driving
- Talking to customers
- Fault finding
- Writing quotes
- Waiting on approvals
- Training
- Meetings
- Callbacks
Only part of that day is:
- Tools in hand
- Fixing the problem
- Chargeable
In real HVAC service businesses, only about 50–55% of paid hours are billable.
That’s normal.
Ignoring it is not.
Why Charging “Per Job” Still Needs Billable Hours
Even if you use flat-rate pricing, billable hours are still underneath it.
Every flat-rate job is built from:
- Time
- Cost
- Overhead
- Profit
If you don’t know your billable hour rate:
- Flat rates are guesses
- Discounts are dangerous
Add-ons feel random
What Happens When You Don’t Use Billable Hours
Here’s what most service departments experience:
- High call volume
- Low profit
- Techs always rushed
- Discounts used too often
- Owners confused by the numbers
They think:
“If we just do more jobs, it’ll fix itself.”
It won’t.
The Fix: Price Time First
A proper service pricing model works like this:
- Work out real billable hours per tech
- Work out real cost per billable hour
- Add overhead per billable hour
- Add profit
- Lock that rate into the system
Everything else builds on that.
Why Billable Hours Protect the Business
When pricing is built on billable hours:
- Every job contributes to overhead
- Every job contributes to profit
- Techs don’t underquote
- Discounts are controlled
- Growth doesn’t create losses
It brings discipline to service pricing.
Why This Is Critical as You Grow
As service teams grow:
- Overhead increases
- Admin increases
- Management increases
- Training increases
If pricing isn’t tied to billable hours:
- Growth increases losses
- Not profit
Billable-hour pricing scales properly.
Guesswork does not.
Simple Tradie Rule
If you remember nothing else, remember this:
Service departments sell time.
Time must be priced correctly.
If you don’t know your billable hour:
- You’re guessing
- Your techs feel the pressure
Your business carries the risk
Want to Know Your Real Number?
We built a simple tool that lets you:
- Enter your wages
- Enter productivity
- Enter overhead
- See what you actually need to charge
No accounting talk.
No spreadsheets.
Just trade numbers.