Most plumbing shops do best with flat rate for repeatable repairs and hourly (time and materials) for jobs where nobody can see the scope until the wall is open. Flat rate moves the risk of a long job onto you, so it only pays if your task times are measured and your price is built from your real cost per billable hour.
The debate is often framed as which one customers prefer. That matters, but the bigger question is whose problem it is when a 45-minute job takes two hours.
Who carries the time risk
Hourly. The customer pays for the time it takes. If the shutoff valve is seized and the job runs long, the bill goes up. Your margin per hour stays fixed. The risk sits with the customer, which is why they often ask for a not-to-exceed number.
Flat rate. The customer pays one price agreed before work starts. If the job runs long, you eat the extra time. If it runs short, you keep the difference. The risk sits with you.
Flat rate also changes your tech's incentives. On hourly, a slow tech earns the same margin per hour. On flat rate, a slow tech costs you money and a fast one makes it. That's why flat rate shops track technician efficiency: billed task hours divided by actual hours.
How to build a flat price
With task time t (the measured median, not the best case), your loaded cost per billable hour R, parts cost P with markup k, and a trip or service component S:
Flat price = t × R + P × (1 + k) + S
R is the important one. It is not the tech's wage. It is the full cost of labor, vehicle and overhead divided by the hours you can actually bill. The break-even labor rate calculator builds it, and the field service pricing guide walks through the inputs.
The median matters. If you price on the fastest time a good tech ever did it, every normal job loses money. If you price on the worst case, you lose the customer to the shop down the road.
What breaks a flat rate system
No measured times. A price book built from guesses is a price book that loses money on some jobs and overcharges on others. Record time on site for each task type for a few months before you commit.
Scope that can't be seen. A hidden leak, an old galvanized line or a slab issue can turn a small job into a large one. Flat-pricing these invites either a loss or an inflated quote.
Not adjusting. Parts prices and labor costs change. A flat price that was right two years ago may now be below cost. Review the book at least yearly.
When hourly is the better fit
- Diagnosis of leaks, low pressure or intermittent problems, before a fix is known
- Remodel and repipe work where the scope moves as walls open
- Commercial work where the customer asks for time and materials billing
- New shops without enough history to set task times
Many shops combine both: a diagnostic or service call fee, then a flat price for the repair once the problem is known. See should you charge a service call fee for how to set that first part.
The drive matters in both models
Neither model prices the drive well on its own. On hourly, customers resist paying for travel. On flat rate, a far-off job carries the same price as one next door. Most shops add a trip component or price by zone. The real cost depends on where the truck is coming from: a job between two nearby calls costs a short hop, while the same job booked alone costs the round trip. More on that in the trip charge entry.
What to take away
- Hourly puts the time risk on the customer. Flat rate puts it on you.
- Flat price = median task time × loaded rate per billable hour + marked-up parts + trip component.
- Measure task times before building a flat rate price book, and review it yearly.
- Use hourly where scope is hidden: diagnosis, repipes, remodels and T&M commercial work.
Common questions
Do customers prefer flat rate plumbing pricing?
Many do, because they know the price before work starts. That certainty is part of what they pay for. Some customers still prefer hourly for small jobs they think will be quick.
Is flat rate more profitable than hourly?
Only if your prices are built from measured task times and your real cost per billable hour, and your techs work at or near those times. A flat rate book built from guesses can lose money on every long job.
How do I switch from hourly to flat rate?
Start with your ten most common repairs. Record actual time on site for each over a few months, build a price for each with the formula above, and keep hourly for everything else until you have the data.
Should I show customers my hourly rate on a flat rate job?
You don't have to. A flat price is the price of the job. If a customer asks, explain what the price includes: labor, parts, the trip and the warranty.