How to price HVAC jobs
To price an HVAC job, build it in five parts: (1) scope the job on site, (2) cost the equipment and materials with markup, (3) cost the labor hours, (4) add overheads and margin, and (5) present a clear written quote with options.
The steps
- Scope the job on site. Do a load calculation, check the electrical, gas line, venting, line set and duct condition. Surprises found after you quote — an undersized breaker, a corroded flue — come out of your margin.
- Cost equipment and materials. Price the unit, coil, line set, pad, disconnect, thermostat and consumables at your buy price, then apply a 25–50% markup on equipment to cover warranty callbacks, handling and price movement.
- Cost the labor. Estimate crew-hours realistically — a standard change-out is 8–12 crew-hours — and multiply by your fully loaded labor rate, not just the wage you pay.
- Add overheads and margin. Trucks, insurance, refrigerant licensing, tools, office and marketing typically add 20–30% to direct costs. Add net profit on top of that — quoting at break-even is how HVAC companies die in the shoulder season.
- Present options in writing. Quote good/better/best — e.g. SEER2 14, 16 and variable-speed — with a clear total, inclusions, warranty terms and an expiry date. Tiered quotes close more and lift the average ticket.
| Line | Amount |
|---|---|
| 3-ton condenser + coil (marked up) | $3,450 |
| Line set, pad, disconnect, misc materials | $420 |
| Labor — 10 crew-hrs @ $110 | $1,100 |
| Permit + refrigerant handling | $280 |
| Subtotal | $5,250 |
| Sales tax (7%) | $368 |
| Total | $5,618 |
FAQs
How do I price HVAC jobs?
Scope on site, cost equipment and materials with a 25–50% markup, cost realistic labor hours at your fully loaded rate, add 20–30% overhead plus profit, and present a tiered written quote.
What margin should an HVAC company target?
Successful residential shops target 50–60% gross margin on installs and service, landing at 10–20% net after overhead. Below 40% gross, one bad month erases the quarter.
Should I give free estimates?
Free estimates on installs are standard and priced into your margin. For diagnostic service calls, charge a fee — your diagnosis is the product — and consider crediting it against approved repairs.