How to price plumbing jobs without guessing

Most plumbers set their first prices by asking around, then nudge them up when the truck payment goes up. That works until it doesn't: a slow month, a callback, or a job that took twice as long, and the money is gone. A better starting point is simple. Work out what one billable hour costs your business, add the profit you want, and build every price from that.

This guide walks through it in four steps: your hourly cost, your hourly price, your materials markup, and flat rates.

Step 1: Add up what a year of your business costs

Write down everything you spend in a year to stay in business, even in a month with no jobs. Use last year's bank statements if you have them.

• Vehicle: payment or lease, fuel, insurance, repairs.
• Insurance and licensing: general liability, workers' comp, bonding, license renewals, continuing education.
• Tools and equipment: new tools, repairs, a drain machine or camera, the shop or storage space.
• Office: phone, software, accounting, marketing, website, bank and card fees.
• People: wages for helpers or office staff, plus payroll taxes and benefits.
• You: the salary you need to pay yourself. Treat it as a cost, not as "whatever is left".

Leave materials out of this list. You'll charge for them separately in step 3.

Step 2: Count the hours you can actually bill

This is where most pricing goes wrong. A year has about 2,080 working hours at 40 hours a week, but you can't bill all of them. Take out holidays, vacation and sick days. Then take out the hours you work but can't charge for: driving between jobs, buying parts, writing quotes, chasing payments, callbacks.

Track a few normal weeks to find your own number. If you don't know it yet, start with a cautious guess and correct it later. The example below assumes 1,400 billable hours a year for a solo plumber. That is an example, not a rule.

Your cost per billable hour

Cost per billable hour = (yearly costs + your salary) ÷ billable hours

Your hourly price

Add profit on top. Profit is what pays for a new truck, a slow winter, or the day you hire a second tech. The safest way to add it is as a margin, so the profit is a share of the price, not of the cost:

Hourly price = cost per billable hour ÷ (1 − profit margin)

A worked example

Every number in that table is an example. Put in your own. The point is the method: if you charge less than your cost per billable hour, every job loses money, however busy you are.

How much should a plumber charge per hour?

There is no single right number, because costs differ so much between a solo plumber in a small town and a shop with three trucks in a big city. The formula above gives you your floor. Then compare it with your local market. If your number is far above what customers will pay, look at the inputs: too few billable hours, a cost you can cut, or work that should be priced differently. If it's below the market, you have room to charge more.

Step 3: Mark up materials, and know markup from margin

You should charge more for parts than you paid for them. You spent time choosing and picking them up, you carry the risk if one fails under warranty, and you pay for the trip to return the wrong one.

Markup and margin are not the same thing, and mixing them up quietly costs money. Markup is added to your cost. Margin is the share of the selling price that is profit.

Margin = markup ÷ (1 + markup)

Many shops use a sliding scale: a lower percentage on expensive items like a water heater, and a higher one on small parts like fittings and supply lines, where the dollar amount is small but the handling is the same. Whatever you choose, write it down so every quote uses the same rule.

Step 4: Turn it into flat rates

Customers prefer a price up front to an hourly meter. A flat rate is just your hourly price and markup, applied to the time and parts a job usually takes:

Flat price = (typical hours × hourly price) + (parts × (1 + markup)) + fixed extras

For example, a 50-gallon gas water heater swap that usually takes 3.5 hours, with a heater that costs you $650 and a 30% markup:

Use your real average time, not your best day. If the same job sometimes takes 2 hours and sometimes 5, split it into options (easy access, attic install) or price it from a site visit. Collected together, these flat rates become your price book. We cover that in how to build a plumbing price book.

Plumbo builds every quote from your own price book and never makes up a price. See how it works in 60 seconds →

Service calls and after-hours work

Two fees are worth setting before the phone rings:

• A service call or diagnostic fee covers the trip and the first look, whether or not the customer goes ahead. Some plumbers credit it toward the job if the customer approves on the spot. Decide your rule and say it on the phone.
• An after-hours or emergency rate for nights, weekends and holidays. Set it from the same math: those hours cost you more, and you can work fewer of them.

Five pricing mistakes that eat your profit

1. Copying the cheapest competitor. You don't know their costs, or whether they're still in business next year.
2. Pricing only the hours on site. Driving, quoting and buying parts are part of the job's cost.
3. Forgetting small items. A shutoff valve, a supply line, an expansion tank, the haul-away. Each one is small; together they're your margin. See the water heater quote checklist.
4. Not charging for the second trip. If the customer wasn't home, or the parts changed, say up front what that costs.
5. Never updating prices. Review your rate and price book at least once a year, and whenever supplier prices jump.

The short version

Find what an hour of your business costs. Add profit as a margin. Mark up parts with a written rule. Turn your common jobs into flat rates and keep them in one place. Then quote the same way every time.