Plumbing Pricing: How to Set Rates That Cover Costs
Set plumbing prices from your own costs, not from a competitor’s website. Add up what one technician and truck cost you for a year, including wages, payroll taxes, the truck and a share of overhead, divide by the hours you can actually bill, then add profit. That gives you a billable hourly rate, and every flat-rate price is that rate times the hours a task takes, plus parts. The worked example below lands at $158 an hour for a three-truck shop, and every line can be swapped for your own number.
The plumbing pricing formula in one line
Here it is before the detail:
Billable rate = (labor cost + truck cost + overhead share) / billable hours / (1 – profit margin)
Two things make this different from the usual “what does everyone else charge” approach. First, it divides by billable hours, not paid hours, and that one choice is what sinks a rate built the other way. Second, profit is a margin on the price, not a few dollars added at the end, and it comes after you have paid yourself a salary. Your salary is a cost. Profit is what is left after it.
The example below is a shop with three technicians in trucks and an owner who runs the office and sells the bigger jobs. The numbers are illustrations, picked to be easy to follow. Replace each one with yours.
Step 1: what one technician’s year really costs
Start with pay. For reference, the Bureau of Labor Statistics reports a median wage of $30.67 an hour for plumbers, pipefitters and steamfitters as of May 2025. The example tech earns $34.
| Labor line | How it’s figured | Per year |
|---|---|---|
| Wages | $34 x 2,080 paid hours | $70,720 |
| Social Security and Medicare, employer share | 6.2% + 1.45% = 7.65% of wages | $5,410 |
| Federal unemployment (FUTA) | 0.6% of the first $7,000, after the state credit | $42 |
| State unemployment | Your state’s rate and wage base | $500 |
| Workers’ comp | Your carrier’s rate for your class code; 5% used here | $3,536 |
| Health insurance and other benefits | $600 a month | $7,200 |
| Labor cost | $87,408 |
The federal rates come from the IRS pages on Social Security and Medicare withholding and on FUTA, which is 6.0% on the first $7,000 of each employee’s wages, dropping to 0.6% when you get the full 5.4% credit for paying state unemployment. State unemployment and workers’ comp vary widely by state, so get your real rates from your state’s notice and your insurance agent.
Step 2: count the hours you can actually bill
This is the step that decides whether the rate works. A tech paid for 2,080 hours does not bill 2,080 hours. Take out holidays and paid time off first; at 120 hours a year, that leaves 1,960 hours on the clock. Then look at an ordinary eight-hour day:
- 1.5 hours driving between jobs
- 0.5 hours at the supply house
- 0.5 hours of shop time, loading and paperwork
- 0.5 hours on estimates and warranty callbacks nobody pays for
That leaves 5 billable hours out of 8, or 62.5%. Across 1,960 hours on the clock, the example tech bills 1,225 hours a year. To measure your own, add up the hours you invoiced over the last three months and divide by the hours you paid for in the same period. Use the real figure even if it hurts. A rate built on 80% billable when you run at 60% loses money on every job, and no amount of volume fixes it.
Unanswered calls show up here too. A tech sitting between jobs because a call went to voicemail is paid time with nothing to bill. The missed-call calculator puts a dollar figure on that leak if you want to see its size.
Step 3: the truck and the overhead behind it
Each tech needs a stocked truck. The example van costs:
| Truck line | Per year |
|---|---|
| Payment or depreciation | $9,000 |
| Commercial auto insurance | $2,800 |
| Fuel | $6,000 |
| Maintenance and tires | $2,200 |
| Tools and consumables | $2,000 |
| Truck cost | $22,000 |
For a second opinion on the vehicle lines, use the IRS business mileage rate: 76 cents a mile for the second half of 2026, so 18,000 miles comes to $13,680. The example’s payment, insurance, fuel and maintenance total $20,000, about $1.11 a mile. A financed, upfitted van can cost more than the IRS figure; if yours is far above it, look at the payment and the insurance first.
Overhead is everything that keeps the shop open but never rides in a truck: the owner’s salary, rent, software, phones, general liability insurance and licenses, marketing, accounting and the rest. In the example it totals $165,000 a year: owner’s salary $70,000, rent $24,000, software and phones $9,000, insurance and licenses $10,000, marketing $30,000, accounting and legal $6,000, utilities and everything else $16,000. Split across three techs, each truck carries $55,000. The guide on calculating overhead walks through finding these lines in your books.
Step 4: add profit and set the hourly rate
| Per technician, per year | Amount |
|---|---|
| Labor cost | $87,408 |
| Truck cost | $22,000 |
| Overhead share | $55,000 |
| Total cost | $164,408 |
| Billable hours | 1,225 |
| Cost per billable hour | $134.21 |
That $134.21 is break-even. Charge it and the shop pays everyone, including you, and earns nothing. Now pick a net profit margin and divide: at 10% the rate is $134.21 / 0.90 = $149.12; at 15% it is $134.21 / 0.85 = $157.89; at 20% it is $167.76. The example rounds the 15% version to $158 an hour.
Notice that a 15% margin is a 17.7% markup on cost ($158 / $134.21 = 1.177). Mix the two up and a shop that means to make 15% makes 13%: $134.21 x 1.15 = $154.34, and $20.13 of profit on a $154.34 price is a 13% margin. It also helps to see the multiple: the billed rate is about 4.6 times the tech’s $34 wage. When a customer asks why you charge $158 when the plumber makes $34, that ratio is the answer, line by line.
From hourly rate to flat-rate prices
A flat rate is the hourly rate times the on-site hours a task takes for your crew, plus parts at your markup. Drive time is already inside the rate, because Step 2 took it out of billable hours, so do not add it again.
| Task | On-site hours | Labor at $158 | Parts | Flat price |
|---|---|---|---|---|
| Toilet fill valve replacement | 0.75 | $118.50 | $18 cost x 2.0 = $36 | $154.50 |
| Kitchen faucet install, customer’s faucet | 1.25 | $197.50 | None | $197.50 |
| 50-gallon gas water heater replacement | 4.0 | $632 | $1,100 cost x 1.35 = $1,485 | $2,117 plus permit |
Take the hours from your own job history, not a guess. Pull the last ten of each task from your invoices and use the median time, so one nightmare job does not set the price. Once you have twenty or thirty tasks, you have the start of a flat-rate book; the guide to building a plumbing price book covers formatting and good-better-best options.
Two prices sit outside the book. The first is the trip or diagnostic fee, which protects you when the customer declines the work. A visit with 30 minutes of driving and 30 minutes on site uses about one billable hour, which is $134 of cost in the example before any profit. The guide to setting a service call fee covers how to present it. The second is after-hours work. If you pay on-call techs time and a half, labor per billable hour rises from $71.35 to $107.03 while truck and overhead stay at $62.86, so cost becomes $169.89 and the 15% rate is about $200 an hour. Price nights from that arithmetic rather than a round multiplier.
Keeping the price honest over time
- Re-run the math when an input moves. A raise, a new truck payment or an insurance renewal changes the rate. Rebuild it at least once a year.
- Track your close rate by job type. If you win nearly every water heater quote, that price may be low. If you lose most drain calls, look at the price and at how it is presented.
- Measure billable hours every quarter. It is the number that drifts fastest and moves the rate most.
- Don’t quote repairs over the phone. Give the trip fee on the call and the job price on site, in writing, once someone has seen the problem.
Used this way, a plumbing pricing guide is a spreadsheet you own rather than a list of someone else’s numbers. That is also the honest answer to how much to charge for plumbing: what your costs, your hours and your margin say, rounded to a number you can say without flinching.
FAQ
How much do plumbers charge per hour?
There is no single national figure worth copying, because the right rate depends on your wages, truck, overhead and billable hours. In the worked example the cost-based rate is $158 an hour, about 4.6 times the technician’s wage. Build yours with the four steps above.
Should a plumber charge hourly or flat rate?
A flat rate gives the customer a known price before work starts, and it rewards a fast, well-stocked tech instead of a slow one. But a flat rate is only as good as the hourly rate underneath it, so build that first. Hourly still fits jobs you cannot scope, like an open-ended leak search.
What markup should a plumber put on parts?
Pick it from the margin you need, not a habit. A 2.0 multiplier on cost is a 50% margin, 1.5 is 33%, and 1.35 is about 26%. Higher multipliers on cheap parts and lower ones on expensive equipment, as in the example table, keep big tickets from looking inflated.
Do I charge customers for drive time?
Not separately if you built your rate this way. Drive time is already counted as unbillable hours, so the hourly rate pays for it on every job. A trip or diagnostic fee covers the visits that end without billable work.
How do I price emergency and after-hours plumbing?
Recalculate the labor portion at what you actually pay after hours, keep the truck and overhead portion the same, and apply your margin. In the example, time and a half takes the rate from $158 to about $200 an hour. Add a separate trip fee if night calls often end without a repair.
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