Why a plumber's paycheque understates the hour by 20 to 30%
Because payroll taxes, workers' comp and benefits sit on top of the wage, and the accounting software doesn't show them per hour. Estimators who build plumbing bids put the gap at 20 to 30%: if you price labour from the wage on the payroll report, every hour is short by that much before you have paid for the van or the shop.
Then the billable hours shrink it further. A master plumber who owns the shop spends much of the week quoting, ordering and on the phone, so the hours he does bill carry the rest. Count a normal 40-hour week minus holidays, vacation and sick days, not the hours it feels like you work, and then take out the hours nobody pays for. The formula itself is in the true hourly rate guide.
Where $55,300 of plumbing overhead goes
Mostly to the shop, the insurance and marketing. The example shop carries about $55,300 a year that no single job pays for: shop and office rent, power, liability and vehicle insurance, phones, software, licences and bonds with continuing ed, bookkeeping, marketing and uniforms.
Plumbing adds its own lines. Glue, primer, tape and solder get bought by the case. Estimating software can cost a few thousand dollars, and scheduling and accounting tools are yearly bills on top. Spread over the hours the crew bills, every one of these lands in the $69.95. If a line is missing from your list, it is missing from your rate.
Vans, jetters and drain cameras priced by the hour they run
Each piece of equipment gets its own hourly cost, charged only on the jobs that use it. The example shop prices the service van, a drain camera, a jetter, a pipe threader and a mini excavator separately from the labour rate.
That keeps a faucet swap from paying for the jetter, and makes a sewer line dig pay for the excavator. On the example bathroom, the van for the days on site is part of the $2,288.28 labour and van line. A machine that sits most of the year needs a higher hourly cost to earn its keep, so count its real hours, not the hours you hope it runs.
What plumbers charge per hour
From $55 to $325 an hour, and each number is one person's example.
| A | B | |
|---|---|---|
| 1 | Hourly rate | Context |
| 2 | $55, raised in steps to $250 | One plumber's rates over a long career |
| 3 | $80 to $100 | Where one trainer says customers start to push back |
| 4 | $116 | That trainer's standard time-and-materials rate |
| 5 | $325 | A rate high enough to make customers watch the clock |
| 6 | $69.95 break-even, $99.46 earned | Our example shop and bathroom job |
The same trainer charges a diagnostic fee to look at the problem. His point is that if you waive it, the time still has to be paid for, so the flat prices in your book have to be built on a higher internal rate than the one you would quote by the hour.
Plumbing parts markup: bigger on cheap parts, smaller on a water heater
In the one vendor price book we saw, cheap parts carry a big markup and expensive equipment a small one. Parts from a penny to $50 were marked up 150%, and items from $500 to $1,000 got about 30%, because a big markup on a water heater makes it hard to sell.
One owner's own estimating sheet marks up materials 25 to 35%, and our example uses 35% since the bathroom is mostly fittings and valves. Watch the words: a 150% markup is a 60% margin, not 150%. The markup vs margin guide has the conversion.
| A | B | |
|---|---|---|
| 1 | Markup on cost | Margin on the price |
| 2 | 25% | 20% |
| 3 | 35% | 26% |
| 4 | 100% | 50% |
| 5 | 150% | 60% |
What profit margin do plumbing shops aim for?
Around 20% of the price, kept on purpose. One shop past two million dollars a year in revenue says its bids come in at about a 20% margin, and one flat rate trainer says flat rate work should net at least 15 to 20%.
Our bathroom example keeps $1,216.93 of a $5,094.45 price, about 24%, after every wage including the owner's is paid. That profit is what pays for the next van, the slow month and the callback you did not charge for. For how profit and overhead fit together, see overhead and profit.
Should a two-truck shop charge less than a 30-truck shop?
No. The bigger shop spreads its costs over far more billable hours, so its cost per hour can be lower than yours. Its office staff, software and advertising are shared by dozens of trucks. Yours are shared by two.
So matching the big shop's price does not make you competitive, it makes you the one losing money. Once your price comes from your own costs, hold it. Win on showing up, finding the problem and explaining the options, not on being the cheapest number on the list.
From hourly rate to a flat price for a repeat task
A flat price is the task's real hours at your charge rate, plus parts with your markup, plus the drive and the counter run. Build it once for each task you do every week (a toilet reset, a water heater swap), save it, and compare it against your job log every few months.
Say a toilet reset really takes you 1.5 hours door to door. At the example's $99.46 per labour hour that is about $149 in labour, before the flange, the wax ring and your markup. If your minimum charge is higher, the minimum sets the price, and the sheet tells you so.
The Plumbing Pricing Calculator keeps the rate in Shop Setup and builds each flat price on its Quote tab. For a full remodel priced stage by stage, see how much to charge for plumbing jobs, or check your own rate with the free true hourly rate calculator.