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HVAC job price calculator

Price a changeout to the gross margin you need, not a guess at markup. Equipment, materials, crew hours, permit and disposal in, job price out.

Equipment and materials

Labor

Pricing

Job price
Job price

Including sales tax

Direct job cost
Labor cost
Price before tax
Gross profit
Same as a markup of
Sales tax
Deposit to ask for
See the HVAC Kit

Rounded to the cent line by line. A guide, not tax advice.

How it works

  • Direct cost = equipment + materials + (hours × crew × labor cost per hour) + permit, disposal and other costs.
  • Price = direct cost ÷ (1 − target margin). At a 45% margin, $5,308 of cost becomes $9,650.91.
  • Margin vs markup: a 45% margin is an 81.8% markup. Pricing with markup is how many shops end up short.
  • Sales tax can be left off, charged on the equipment and materials at their selling price, or on the whole price, depending on your state.

States treat HVAC installs differently. In many, a contractor installing equipment into a home is the consumer of it: you pay sales tax when you buy and charge none on the job. Others tax equipment sold separately, and a few tax the whole job. Check with your state before you set this up.

Three worked examples

Each one was checked against an independent calculation. Type the same numbers above and you will get the same results.

Example 1

3-ton AC changeout, tax on equipment and materials

Equipment$3,800
Materials$650
Labor8 h × 2 × $38.00
Other costs$250
Target margin45%
Direct cost$5,308
Price before tax$9,650.91
Markup equivalent81.82%
Sales tax$566.36
Total$10,217.27
Deposit$3,065.18

Example 2

Gas furnace replacement, no sales tax on the job

Equipment$2,200
Materials$400
Labor6 h × 2 × $35.00
Other costs$150
Target margin40%
Direct cost$3,170
Price before tax$5,283.33
Markup equivalent66.67%
Total$5,283.33

Example 3

Ductless mini-split, whole price taxable

Equipment$1,900
Materials$350
Labor7 h × 2 × $32.00
Other costs$100
Target margin42%
Direct cost$2,798
Price before tax$4,824.14
Markup equivalent72.41%
Sales tax$301.51
Total$5,125.65
Deposit$2,562.83

USA (Sales Tax)

Now do it for every job.

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Questions

What gross margin should an HVAC company use?

Residential replacement shops commonly target 35% to 50% gross margin on installs, because that margin has to pay for the office, trucks, warranty callbacks and sales time. Use your own overhead to set it: if overhead is 30% of revenue and you want 10% profit, you need 40%.

Why does 40% markup not give 40% margin?

Markup is on cost and margin is on price. $1,000 of cost with a 40% markup sells for $1,400, which is a 28.6% margin. To earn 40% margin you need a 66.7% markup.

Does this size the equipment?

No. It prices the job you have already specified. Sizing should come from a load calculation such as ACCA Manual J, not square footage alone.