“Should I switch from time and materials to flat rate?” The honest answer starts with what actually changes. Under time and materials, the homeowner carries the risk of the clock: if the job runs long, they pay for it. Under flat rate, you quote one price before the work starts and you carry that risk. You lose on the job that fights you and keep the difference on the one that goes well.
That trade is worth making only if your prices are built from your own numbers. A flat-rate price book copied from someone else, or built on guesses, just moves the risk to you without the information to manage it. Here is how to build one from what you already have.
The three numbers behind every flat price
Every line in a service price book comes from the same formula:
Flat price = (book time × your selling rate per hour) + materials at your markup
1. Book time, from your own invoices
List the 30 to 50 tasks you did most often last year: the faucet cartridges, the water heaters, the capacitors and contactors, the breakers and outlets. For each, pull the actual hours from time cards or invoices and take the middle of them, not your fastest tech’s best day. That middle figure is the book time. Write down the spread too: a task that runs anywhere from 30 minutes to three hours is a warning that it needs to be split into two book lines, or priced after a diagnosis.
2. Your selling rate per hour
Start with what an hour of a technician actually costs you once payroll taxes, workers’ comp, paid time off and the hours you cannot bill are counted. Your Real Hourly Cost: Working Out Labor Burden walks through that sheet. Then divide by one minus your target margin to cover overhead and profit; Markup vs. Margin explains why you divide rather than multiply.
For scale, the wages of the three trades sit close together. The Bureau of Labor Statistics put the May 2025 median at $30.67 an hour for plumbers, pipefitters and steamfitters, $30.38 for electricians, and $29.33 for heating, air conditioning and refrigeration mechanics and installers. On top of wages, BLS measured private employers of installation, maintenance and repair workers in June 2026 at $15.41 an hour in benefits against $33.61 in wages, so benefits were 31.4% of total compensation. Those are national figures, not your costs. The point is that the big differences between a plumbing book and an electrical book will come from task times and materials, not from the wage.
3. Materials at your markup
Give each task a standard parts list and price it from your supplier’s current cost. You may want a lower margin on expensive equipment than on small parts, so a water heater does not come out absurd; whatever you choose, write it down so every tech prices the same way.
A worked example
Say a plumbing shop has worked out a loaded cost of $54 per billable hour for its techs and wants a 40% margin. Its selling rate is $54 ÷ 0.60 = $90 an hour. For simplicity, the example prices parts at the same 40% margin. Every input here is invented for the example; put in your own.
| Task | Book time | Labor at $90 | Parts cost → price | Flat price (rounded) |
|---|---|---|---|---|
| Replace a toilet fill valve | 0.5 h | $45 | $12 → $20 | $65 |
| Replace a kitchen faucet, customer-ready lines | 1.25 h | $112.50 | $18 → $30 | $145 |
Now watch the risk move. If a tech spends 0.8 hours on the fill valve instead of 0.5, the shop’s cost is 0.8 × $54 + $12 = $55.20 against a $65 price: still covered, but most of the margin is gone. If he finishes in 0.3 hours, the cost is $28.20 and the shop keeps the difference. Book times taken from the middle of real jobs are what make the fast and the slow even out across a month. Book times taken from your best day are how a flat-rate shop gets busier and poorer at the same time.
Notice what is missing from those prices: the drive. That is the next decision.
Trip charge or diagnostic fee?
Every service call costs you before any work starts: the drive, the walk-in, the first look. There are two common ways to charge for it, and they answer different questions.
Then decide one thing and say it every time, before the visit: is the fee credited toward the repair if the homeowner goes ahead, or not? Either answer can work. Changing the answer from call to call cannot, because the homeowner who was told one thing on the phone and another on the invoice will not be back.
Where the three trades differ
Plumbing: the hidden condition
The job you quote is the one you can see; the one you find may be different: the shutoff valve that will not turn, the corroded section behind the fixture. Do not leave those to a conversation on the doorstep. Give each common surprise its own book line, priced in advance (“replace seized shutoff valve,” “replace corroded supply line”), so a surprise becomes a second flat price the homeowner approves before you start it. BLS notes that most plumbers work full time, including nights and weekends, and are often on call to handle emergencies. If you answer those calls, put the after-hours price in the book now, as a set multiplier or a set fee, rather than inventing it at midnight.
HVAC: diagnosis first, and the season
A no-heat or no-cool call is diagnosis-first by nature: the fault has to be found before it can be priced. So the diagnostic fee carries more of an HVAC book than a plumbing one. Two more lines deserve their own treatment. Refrigerant should be priced by the pound as a separate line and updated whenever your cost moves; The Refrigerant Switch explains why the older refrigerants are getting harder to price. And BLS notes that HVAC technicians may work overtime or irregular schedules during peak heating and cooling seasons. An overtime hour costs you more than a regular one, so check whether your summer book prices summer labor.
Electrical: troubleshooting and paperwork
Electrical service work splits cleanly into the predictable (swap a breaker, add a GFCI receptacle, replace a fixture) and the open-ended (find the intermittent fault). Flat-price the first kind freely. For the second, sell diagnosis in fixed blocks and quote the repair once you have found it. Where your local rules call for a permit or an inspection on a task, put the permit fee and your time to pull it on its own line, so a permitted job and an unpermitted one never carry the same price by accident. BLS notes that overtime is common for electricians, which belongs in your loaded cost if it is common in your shop.
When flat rate is the wrong tool
Keep the book honest
Once a quarter, compare the actual time on the last few jobs of each task with its book time. A line that runs long every time is underpriced; fix the time, not the tech. Re-price materials whenever your supplier’s price list changes, and re-run your hourly cost when wages, workers’ comp or benefits change. A price book that was right in January can lose money by July without a single bad job.
A finished price book can also feed your website. If you want those prices in front of homeowners before they get in touch, Showing Prices on Your Website Without a Quote Tool shows the hand-built way, and NapkinPrice™ turns your own rules into an instant price range on the site you already have.