Equipment markup typically ranges from 15% on high-ticket installations to 40% on smaller units or repair parts. The percentage tends to drop as the equipment price goes up because a 40% markup on a $12,000 commercial unit prices you out of the market. Materials like refrigerant, copper, ductwork, and fittings usually carry a 25-50% markup depending on the job type.

Labor is where the math gets more complicated. Most HVAC contractors bill labor at 2-3 times what they pay the technician. A tech making $30 per hour gets billed out at $75-100 per hour. That multiplier has to cover more than just wages. It covers payroll taxes, workers comp, health insurance, vehicle costs, tools, training, and the unbillable time between jobs.

These ranges vary based on your market, service type, and overhead structure. Residential service calls typically carry higher markups than commercial contract work because the overhead per dollar of revenue is higher. A truck roll to a home for a $200 repair costs almost as much to operate as a truck roll for a $2,000 installation.

The more important question is whether your markup actually generates profit after covering overhead. Many HVAC contractors use industry standard markups without knowing if those percentages work for their specific cost structure. A contractor running three trucks with a shop and office staff has very different overhead than a one-truck operation working out of a garage.

Job costing is how you find out if your pricing works. Track every job by labor hours, materials, equipment cost, and any subcontractor expenses. Compare what you charged to what you spent. Do this for a few months and patterns emerge. Maybe your residential service calls are profitable but your installation jobs barely break even. Maybe callbacks are eating your margin on certain job types.

Callbacks matter more than most contractors realize. If 10% of your installations require a return visit, that unbilled labor has to come from somewhere. It comes from the markup on the original job. If you didn’t price for it, you gave away the profit.

The contractors who stay profitable long-term know their numbers at the job level. They know which job types make money and which ones just keep the trucks busy. They adjust pricing based on actual cost data, not just what competitors charge or what feels reasonable.

Working with Saratoga Springs, Utah bookkeepers who understand construction and trades accounting helps you see this clearly. The goal is turning your markup percentages from industry guesses into informed decisions based on what your business actually spends to complete each job.