Free · Pricing & profit
HVAC Markup Calculator
Enter equipment, materials and labor, pick the gross margin you need, and get the selling price, profit and the markup percentage that produces it. The whole margin table is underneath so you can see what each point is worth.
Job cost
Fully burdened cost, not your billing rate
Permit, disposal, subcontractor, crane
Target
Margin is profit as a share of the price. 35–45% is typical on residential installs.
Selling price
$6,000
Gross profit
$2,400
price − cost
Markup on cost
66.7%
40% margin = 66.7% markup
Margin, not markup
This job at every margin
| Margin | Selling price | Profit | Markup |
|---|---|---|---|
| 25% | $4,800 | $1,200 | 33.3% |
| 30% | $5,143 | $1,543 | 42.9% |
| 35% | $5,538 | $1,938 | 53.8% |
| 40% | $6,000 | $2,400 | 66.7% |
| 45% | $6,545 | $2,945 | 81.8% |
| 50% | $7,200 | $3,600 | 100.0% |
| 55% | $8,000 | $4,400 | 122.2% |
| 60% | $9,000 | $5,400 | 150.0% |
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Markup versus margin
Margin is profit divided by the selling price. Markup is profit divided by cost. They describe the same dollars from two sides, and confusing them is the most expensive mistake in HVAC pricing: a contractor who "marks up 40%" and thinks he is earning 40% is actually earning 28.6%.
| Target margin | Required markup | Multiply cost by |
|---|---|---|
| 25% | 33.3% | 1.333 |
| 30% | 42.9% | 1.429 |
| 35% | 53.8% | 1.538 |
| 40% | 66.7% | 1.667 |
| 45% | 81.8% | 1.818 |
| 50% | 100.0% | 2.000 |
| 55% | 122.2% | 2.222 |
| 60% | 150.0% | 2.500 |
What margin should an HVAC job carry?
- Residential replacement: 35–45%. Equipment is a big share of cost, so the dollars are there even at the low end.
- Service and repair: 50–65%. Diagnostic skill is the product; parts are a small share of the ticket.
- Commercial and new construction: 25–35%. Bigger tickets, competitive bids, slower payment.
- Maintenance agreements: 40–50%, and the real value is the replacement leads they generate.
The margin has to cover overhead before it becomes profit. If overhead runs 25% of revenue, a 40% gross margin leaves 15% net, which is a healthy HVAC business. A 30% gross margin leaves 5%, which is one bad month from a loss. Get the overhead number from the labor rate calculator and check finished jobs with the profitability calculator.
Use fully burdened labor cost
The labor line here is what the hour costs you: wage plus payroll taxes, workers' comp, benefits and the unbillable time the tech is paid for. A $28 wage is usually a $45–55 cost per billable hour before overhead. Putting the bare wage in this calculator inflates your apparent margin by ten points or more.
Frequently asked questions
What is the difference between markup and margin?
Markup is profit as a percentage of cost; margin is profit as a percentage of the selling price. A job that costs $3,000 and sells for $5,000 has a $2,000 profit, which is a 66.7% markup and a 40% margin. To hit a target margin, divide cost by one minus the margin.
What is a good markup for HVAC?
Most residential HVAC contractors need a 40% gross margin, which is a 67% markup on total job cost, to cover overhead and earn a 10–15% net profit. Service work carries higher margins, 50–65%, and commercial bids lower, 25–35%.
How much should I mark up HVAC equipment?
Equipment alone is commonly marked up 30–50% on residential replacements, with materials and parts marked up 50–100% because they are smaller line items. What matters is the blended margin on the whole job, which is what this calculator solves for.
Should labor be marked up too?
Yes. Every dollar of cost on the job, including labor, needs to carry margin, or the overhead that labor generates goes uncovered. Enter your fully burdened labor cost, not the billing rate, so the margin applies to it correctly.
Why does a 40% markup only give a 28.6% margin?
Because markup is measured against cost and margin against price. Marking $1,000 up by 40% gives a $1,400 price. The $400 profit is 40% of the cost but only 28.6% of the $1,400 price. Contractors who price by markup routinely earn less than they think.