Flat Rate Pricing Calculator

Proper pricing is one of the biggest drivers of profitability in a service business. This calculator helps you build flat-rate prices using either gross profit targets or markup rules, while factoring in labor, materials, dealer fees, commissions, and true job cost. Use it to quickly check whether your pricing protects margin before it goes into your price book.

At the bottom of the page we will briefly discuss which is better markup or gross margin calculations.

Markup vs. Gross Profit: Which Is Better?

Markup is simple and easy to apply, especially on cheaper repair items where technicians commonly sell small add-ons, “band-aid” fixes, or one-repair solutions. The downside is that markup can become risky on more expensive parts. If an installation error damages the part or voids the warranty, a low markup may not leave enough profit to absorb the loss, which can cause the company to lose money on the job.

Gross profit pricing gives a clearer view of the actual margin after labor, materials, dealer fees, commissions, callbacks, and other inefficiencies.

In HVAC, replacement work is often targeted around 55% gross profit, and replacements commonly make up about 80% of total revenue. Repair items are often targeted around 72% gross profit, but after callbacks and inefficiencies, the total company realized GP may land closer to 55%.

With operating expenses commonly around 35%, that can leave a target net profit of 20% or better. In plumbing, many companies target around 60% GP, which may settle closer to 55% GP after inefficiencies, again leaving roughly 20% net profit if operating expenses are around 35%.