To price service calls, start from your fully loaded cost per billable hour, not the technician's wage: total labor, vehicle and overhead cost divided by the hours you can actually bill. Then add your target margin and choose a pricing model, flat rate or time and materials, that recovers that rate on every job, including the drive to get there.
Pricing is where field service companies most often lose money without noticing. The jobs get done, customers are happy, the trucks are busy, and somehow there's nothing left at the end of the year. The usual cause isn't a bad price on any single job. It's a price built on the wrong number of hours.
This guide gives you a method you can run on your own figures. It isn't tax or accounting advice. Have your accountant check the cost inputs.
Why the hourly wage is the wrong starting point
Say you pay a technician $30 an hour. It's tempting to think a $90 hourly rate is a healthy three times wage. Two things break that.
First, wages aren't the whole cost of labor. Payroll taxes, workers' compensation, benefits, paid time off and training all sit on top. Your accountant can give you your actual burden rate.
Second, and bigger, you pay for every hour but can only bill some of them. Drive time, shop time, waiting for parts, callbacks and admin are all paid and none are billed. If a tech is paid for 40 hours and bills 24, every billed hour has to carry the cost of 1.67 paid hours.
That ratio is your billable hours share, and it's the most important number in your pricing.
Step 1: Find your billable hours
Billable hours per tech per year = paid hours × billable share
To measure the billable share honestly, take a few weeks of real days and add up the time on site at billable jobs. Divide by paid hours. Don't use the schedule. A two-hour block on the calendar might include 40 minutes of drive. See booked vs utilized for why scheduled time overstates billable time.
Most of the gap is drive time. The technician utilization calculator helps you separate it from the rest.
Step 2: Add up the cost of a technician-year
Include everything it costs to put one technician on the road for a year:
- Loaded labor: wages plus burden (taxes, insurance, benefits, PTO)
- Vehicle: payment or depreciation, insurance, fuel, maintenance
- Overhead share: office staff, rent, software, marketing, owner salary and everything else not tied to one job, divided by the number of technicians
For a sense of market wages, the U.S. Bureau of Labor Statistics reports a median of $29.33 per hour for HVAC mechanics and installers and $30.67 per hour for plumbers, pipefitters and steamfitters (May 2025 data). Your local market and your techs' experience will differ. Use your actual payroll.
For vehicles, a quick sanity check is the IRS business standard mileage rate, which is meant to reflect the full per-mile cost of operating a vehicle. For July through December 2026 it's 76 cents per mile (it was 72.5 cents for the first half of the year). Your truck, with upfitting and inventory on board, probably costs more.
Step 3: Calculate cost per billable hour and your rate
Cost per billable hour = annual cost per technician ÷ billable hours per technician
Rate needed = cost per billable hour ÷ (1 − target margin)
Target margin here means the share of revenue left after these costs, before taxes. Your accountant can help you pick a realistic target. Note that dividing by (1 − margin) isn't the same as multiplying by (1 + margin). A 30% margin on cost of $100 requires a $143 price, not $130.
The point of the example is the middle two lines. Same tech, same wage, same truck. If you assume 75% of hours are billable and the truth is 55%, your cost estimate is about 27% too low on every hour. Use the break-even labor rate calculator to run your own numbers.
Step 4: Choose a pricing model
Once you know the rate you need, decide how to charge it.
Time and materials
Time and materials bills actual hours at a set rate plus parts at a markup. It's transparent and low risk for you on unpredictable work like troubleshooting.
The drawback: customers watch the clock, faster techs earn the company less, and the customer doesn't know the price until the end.
Flat rate
Flat-rate pricing charges a fixed price per task, usually from a price book. Each price is built from a standard task time multiplied by your rate, plus parts at your markup.
Flat price = (standard hours × rate needed) + (parts cost × (1 + parts markup))
Customers get certainty, faster techs make the company more, and you stop arguing about time. The risk is a price book built on wrong standard times. Review your actual time per task against the book at least yearly.
Trip charges and diagnostic fees
A trip charge or diagnostic fee covers the cost of getting a truck to the door, whether or not the customer buys the repair. Use the truck roll cost calculator to see what a truck roll actually costs you.
Many companies apply the diagnostic fee to the repair if the customer goes ahead. Either way, decide on purpose. If you waive it, the cost is still there and is being paid by your other jobs.
Maintenance agreements
Agreement pricing is a bundle: the scheduled visits, plus whatever discount or priority benefits you offer. Price the visits from standard time and your rate like any flat-rate task, including realistic drive time per visit. Then price the benefits separately so you know what each one costs. The preventive maintenance scheduling guide covers how drive time per visit changes with clustering.
Step 5: Price the drive
Every pricing model has to recover drive time somewhere. There are three ways:
- Inside the rate. Your billable-share math already spreads drive across all billable hours. This is the default.
- As a trip charge. Visible to the customer, and it covers short jobs where the drive is a large share.
- By zone. Charge more for jobs outside your core area, where the drive is longer.
Zone pricing is underused. A job 40 minutes outside your core area costs you 80 minutes of round-trip drive or a disrupted day. If you charge the same as a job around the corner, the nearby customers are paying for the far one. The other fix is to schedule so far-out jobs share a day with neighbors. That's a service area and scheduling decision, and it's the part of pricing CrewLink touches: scheduling crews around the drive, so the travel you priced in is the travel that actually happens.
Step 6: Check every discount
Discounts look small and cost a lot, because they come straight out of margin.
Extra volume needed to break even on a discount = margin ÷ (margin − discount) − 1
At a 30% margin, a 10% discount requires 0.30 ÷ 0.20 − 1 = 50% more jobs to make the same profit. At a 20% margin, the same 10% discount requires 100% more jobs. That's why "10% off" for a season can quietly empty the bank account of a busy company.
Discounts can still make sense, for example to fill slow weeks when the alternative is idle techs. Just calculate the volume they need before you run them.
Step 7: Review prices on a schedule
Costs drift. Wages rise, fuel moves, parts go up. Set a calendar reminder to rebuild your rate at least once a year and to compare actual time per task against your price book. Track gross margin per job and average ticket monthly in your field service reporting so you see drift before it shows up in the bank balance.
For turning prices into customer-facing estimates, see the quoting and estimates guide.
What to take away
- Price from cost per billable hour, not the technician's wage.
- Billable share is the most important input. Measure it from real days, not the schedule.
- Rate needed = cost per billable hour ÷ (1 − margin). Dividing is not the same as marking up.
- Flat rate, time and materials, trip charges and agreements are ways to collect the rate. None changes what the rate has to be.
- Every model must recover drive time. Check every discount against the volume it needs.
Common questions
How do I calculate what to charge for a service call?
Add up the annual cost of a technician, including wages, burden, vehicle and a share of overhead. Divide by the hours that technician can actually bill in a year to get cost per billable hour. Divide that by one minus your target margin. That's the hourly rate your prices need to recover.
Is flat-rate or hourly pricing better for field service?
Flat rate gives customers certainty and rewards efficient techs, but depends on accurate standard times. Time and materials is lower risk for unpredictable work like diagnosis. Many companies use flat rate for common repairs and time and materials for troubleshooting and unusual jobs.
Should I charge a trip fee?
A trip charge recovers the cost of sending a truck when the customer doesn't buy a repair, or when the job is short. Whether to charge one is a business choice. If you don't, that cost is still real and gets spread across your other jobs.
How do I account for drive time in pricing?
Either spread it across all billable hours through your billable-share calculation, charge it directly as a trip charge, or charge more for jobs outside your core area. Most companies do the first and add zone pricing for distant jobs.
How often should I raise prices?
Rebuild your rate from current costs at least once a year, and whenever a major cost such as wages, fuel or insurance changes. Compare actual job times against your price book at the same time.