Plumbing service call pricing
A service call price should cover parts, time, the truck and overhead, then leave the margin you planned.
Cost = parts + labor + truck + overhead
Price = cost divided by (1 − target margin)
The cost lines
- Parts
- Labor: hours at the loaded rate, including drive time.
- Truck cost per call
- Overhead per hour: x the hours on the call.
Illustrative example
Examples use made-up numbers. Education only, not tax, legal or investment advice.
The setup
- Parts: $85.00
- Labor: 1.5 hours x $42.00 = $63.00
- Truck: $28.00
- Overhead: 1.5 hours x $30.00 = $45.00
The math
- Cost = $85.00 + $63.00 + $28.00 + $45.00 = $221.00.
- Price at 40% target margin = $221.00 divided by 0.60 = $368.33.
- Profit = $368.33 − $221.00 = $147.33.
What to remember
Pricing from a target margin guarantees the margin. A flat percent added to cost does not: 40% added to $221.00 gives a 28.57% margin.
Questions owners ask
Should drive time be billed?
It is labor cost either way; include it in the price or in a trip charge.
What goes into truck cost per call?
Fuel, maintenance, insurance and payments, divided by calls per year.
Margin or markup?
Set a target margin and divide cost by one minus that margin.
Price your next service call
The Owner Track Letter
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Educational content, not tax, legal or investment advice.