Flat rate pricing means charging one fixed price for a defined task, agreed before the work starts. A price book is the list of those prices, one line per task, built once so every tech quotes the same job the same way. Building one comes down to four inputs: labor time at a fully burdened hourly cost, materials with a markup, a share of overhead, and profit.
Flat rate versus time and materials
Time and materials pricing bills an hourly labor rate plus the cost of parts, added up after the job is done. The customer doesn't know the final number until the tech is finished. Flat rate pricing quotes the number first: the customer agrees to a price before any work happens, and the price doesn't change if the job runs long or short.
The trade press has argued this difference for decades. A 2003 ACHR News piece on flat rate pricing points out the core problem with billing by the hour: a technician who gets faster at a repair ends up billing fewer hours, so the better they get, the less the company earns from that job (achrnews.com, checked September 25, 2026). Flat rate removes that penalty, since the price is set by the job, not by how long one tech happens to take.
ACCA's own HVAC blog takes the same position, describing flat rate, or "up front pricing," as the standard approach for residential service departments rather than a niche alternative to hourly billing (hvac-blog.acca.org, checked September 25, 2026). Most contractors who quote flat rate still track labor hours closely, since hours are still the main input to the price. What changes is that the customer never sees an hourly meter running.
What goes into a flat rate task price
A price book number is built from four pieces, in this order:
- Labor: the hours a task takes, multiplied by the fully burdened cost of a tech's time, not their hourly wage.
- Materials: what the parts cost you, with a markup added so the parts line turns a profit too.
- Overhead: a share of the shop's fixed costs, rent, insurance, trucks, office staff, spread across billable hours.
- Profit: what's left over after the first three are covered, set as a target margin.
The first input, labor hours, is where trade groups keep reference data. PHCC's Labor Unit Database publishes national average installation times for plumbing tasks, so a plumbing contractor can estimate labor hours from that instead of a guess (phccweb.org, checked September 25, 2026).
Labor: use the burdened rate, not the wage
A tech's wage is only part of what they cost you. The burdened rate adds payroll taxes, workers' compensation insurance, health benefits, and paid time off on top of the wage. The wage on a pay stub is the floor, not the true hourly cost of putting a tech on a job. A price book built on wage alone, with none of that added in, will undercharge for labor on every single call.
Materials: cost plus markup
Materials get priced at what you paid for the part, plus a markup that covers handling, inventory carrying cost, and warranty risk, then turns a profit on the part itself, separate from the profit built into labor.
Overhead: spread it across billable hours
Take total monthly overhead, everything that keeps the shop running whether or not a truck rolls, and divide it by the total billable hours your techs produce in a month. That gives you an overhead cost per hour to add into every task price.
Profit: a percentage of price, not a percentage of cost
The common mistake is adding a markup on top of cost and calling it a margin. Say your target is 25 percent: a 25 percent markup on cost and a 25 percent margin on price are not the same number. To hit a target margin, divide total cost by one minus the margin, not multiply cost by one plus a markup percentage.
A worked example
The numbers below are a made-up example with round figures, not a real price book. Use your own labor cost, material cost, and overhead figures instead.
Example task: replace a failed capacitor, a one-hour job.
| Line | How it's figured | Amount |
|---|---|---|
| Labor | 1 hour x $50/hour burdened labor cost | $50 |
| Materials | $40 part cost x 1.5 (a 50 percent markup) | $60 |
| Overhead | $30 per billable hour, shop overhead spread across the month's billable hours | $30 |
| Cost subtotal | $50 + $60 + $30 | $140 |
| Flat rate price | $140 subtotal divided by 0.80, for a 20 percent profit margin on price | $175 |
That $175 is the number that goes on the price book for that task, every time, for every tech. Change the wage, the part cost, the overhead figure, or the target margin, and the number changes too. Rerun the math instead of guessing at a round number that feels right.
Keep the price book current
To run your own numbers, use the free flat-rate price calculator. It works the same way as the example above.
A price book goes stale the same way any other cost estimate does. Review it when a wage goes up, when a supplier raises material costs, when insurance renews at a new rate, or at minimum once a year. A task price built on last year's costs quietly erodes the margin on every call until someone catches it.
The price book only works if every tech quotes from it instead of a number they remember from the last similar job. Whatever dispatch and invoicing software a shop uses, the invoice a tech writes on site is where that number either gets used or gets guessed at. SpanCrew invoices on site for $99 a month flat, with no per-tech pricing, and is currently in early access.