# What Is Flat Rate Pricing?

Flat rate pricing means charging a fixed, upfront price for a defined task, no matter how long it takes. The price is built from standard task hours times your billable hourly rate, plus parts at your markup. A furnace igniter swap costs the customer the same whether the tech finishes in 40 minutes or 90.

## Key takeaways

- Flat rate price = (Task hours × Billable hourly rate) + (Parts cost × (1 + Parts markup)).
- The customer approves the price before work starts, so there's no meter running and fewer billing arguments.
- Fast, skilled techs earn the company more gross profit per hour; slow jobs cost the company, not the customer.
- A pricebook only works if task times and parts costs are checked against real jobs and updated when supplier prices change.
- Flat rate fits repeatable service and repair tasks. Large, uncertain or open-ended work is often better priced as time and materials or a custom bid.

## How does flat rate pricing work?

Flat rate pricing works by pricing the task, not the hour. The tech diagnoses the problem, finds the matching task in the company's pricebook, and gives the customer one total price before touching a tool. If the customer approves, that's the bill. If the job runs long, the company absorbs it; if it goes quickly, the company keeps the difference.

Behind every flat price is the same arithmetic you'd use for an hourly job. It's just done once, ahead of time, for each task you perform often. The difference is who carries the risk of the clock: on [time and materials](https://www.brix.so/learn/time-and-materials) it's the customer, on flat rate it's you.

**Flat rate price**

```
Flat rate price = (Task hours × Billable hourly rate) + (Parts cost × (1 + Parts markup))
```

Where:
- Task hours = the standard time for the task on a typical job, including setup, cleanup and paperwork
- Billable hourly rate = what one billable hour must earn to cover burdened labor, overhead and profit
- Parts cost = what you pay your supplier for the parts the task uses
- Parts markup = your markup on parts, as a decimal (50% = 0.50). See [markup](https://www.brix.so/learn/markup)

## How do you calculate a billable hourly rate for flat rate?

Your billable hourly rate is what each hour a tech spends on a paying job has to bring in. Start from the tech's [burdened labor cost](https://www.brix.so/learn/labor-burden), divide it by the share of paid hours that are actually billable, add [overhead](https://www.brix.so/learn/overhead) per billable hour, then price for your profit target. Using the wage alone is the most common reason flat-rate books lose money.

> **Worked example: an HVAC shop's billable rate**
>
> Illustrative numbers. A tech costs $42 an hour once payroll taxes, workers' comp and benefits are added. Only 60% of paid hours end up on a billable job; the rest is drive time, shop time and training (see [billable hours](https://www.brix.so/learn/billable-hours)).
>
> Labor cost per billable hour = $42 ÷ 0.60 = **$70**.
>
> Overhead is $300,000 a year across 4 techs who each bill 1,200 hours: $300,000 ÷ 4,800 = **$62.50** per billable hour.
>
> Cost per billable hour = $70 + $62.50 = $132.50. To keep 25% of the labor dollar as profit: $132.50 ÷ 0.75 = $176.67. The shop rounds to **$180**.

> **Worked example: pricing a condenser fan motor replacement**
>
> Illustrative numbers. The pricebook's standard time for the task is 1.5 hours. The motor costs $120 and the shop marks up parts of this size 50%.
>
> Labor: 1.5 × $180 = $270. Parts: $120 × 1.50 = $180.
>
> Flat rate price = $270 + $180 = **$450**. That's the price on the tablet, every time.

The [flat rate pricing calculator](https://www.brix.so/tools/flat-rate-pricing-calculator) runs the same math for your own rate and tasks, and the [job pricing calculator](https://www.brix.so/tools/job-pricing-calculator) handles one-off jobs that aren't in your book yet.

## Why does flat rate reward fast techs?

Flat rate rewards speed because the price is fixed while the labor cost isn't. When a skilled tech beats the book time, the extra hour stays with the company as gross profit and frees the tech for the next call. On hourly billing, the same skill lowers the invoice and the company earns less for doing better work.

**The same $450 fan motor job: fast tech vs. slow tech (illustrative)**

|  | Fast tech (1 hour) | Slow tech (2.25 hours) |
| --- | --- | --- |
| Customer pays on flat rate | $450 | $450 |
| Customer would pay hourly ($180/hr + $180 parts) | $360 | $585 |
| Labor cost at $42/hr | $42 | $94.50 |
| Gross profit on flat rate (after $120 motor) | $288 | $235.50 |
| Gross profit per hour on flat rate | $288 | $104.67 |

_On hourly billing, the slow job costs the customer $225 more than the fast one. On flat rate, the customer pays the same and the company sees the difference in [gross profit per hour](https://www.brix.so/learn/gross-profit-per-hour)._

## What is a flat rate pricebook?

A flat rate pricebook is the list of every task your company performs with its fixed price, standard time and parts. Techs use it in the field to quote on the spot, and it keeps prices consistent from tech to tech. Most shops build it as a digital price list inside their quoting software so prices update when costs change.

1. **List your top tasks.** Pull the last year of invoices and list the 50 to 100 repairs and services you do most. That covers most calls.
2. **Set a standard time for each.** Use your own job history: the time a competent tech takes on a typical job, including setup, cleanup and paperwork. Don't use your fastest tech's best day.
3. **Attach the parts.** Link each task to the parts it uses at current supplier cost, with your parts markup.
4. **Price it with your billable rate.** Apply the formula above. Round to clean numbers customers can read easily.
5. **Check it every quarter.** Compare actual time and parts on finished jobs with the book. [Job costing](https://www.brix.so/learn/job-costing) shows which tasks are underpriced.

## Flat rate pricing by trade

Flat rate works best where the same tasks repeat and a tech can see the whole problem before quoting. Here's where it fits in each trade and where it doesn't.

**Where flat rate fits, by trade**

| Trade | Good flat-rate tasks | Usually not flat rate | Watch out for |
| --- | --- | --- | --- |
| HVAC | Capacitors, motors, igniters, tune-ups, thermostat installs | Duct redesigns, hard-to-diagnose intermittent faults | Attic and rooftop access adding hours the book didn't plan for |
| Plumbing | Faucet and toilet swaps, water heater replacements, drain clearing | Slab leaks, repiping, sewer lines with unknown condition | Old shutoff valves that break and turn a 1-hour job into 3 |
| Electrical | Outlet and switch swaps, fixture installs, EV charger installs with set run lengths | Troubleshooting with no known cause, old-house rewiring | Panel upgrades where utility or permit delays add trips |
| Garage door | Spring and opener replacements, roller and cable jobs | Custom door installs | Parts price swings on springs and openers |
| Pest control | Per-visit treatments, inspections | Severe infestations needing multiple visits | Underpricing follow-up visits included in the flat price |
| Cleaning | Per-room or per-visit rates | Move-out and post-construction cleans of unknown condition | Homes that take twice the planned time |

_Roofing and remodeling jobs are usually priced as custom bids from a site measurement rather than from a task pricebook._

## Should HVAC companies use flat rate or time and materials?

For routine residential service and repair, many HVAC companies prefer flat rate because customers get a firm price before work starts and efficient techs make more money per hour. Time and materials still makes sense for open-ended work such as troubleshooting with no clear cause, commercial service contracts that specify hourly rates, and jobs where the scope can't be seen up front. Plenty of shops use both. See [time and materials pricing](https://www.brix.so/learn/time-and-materials) for the side-by-side comparison.

## Is flat rate better for customers?

Flat rate is better for customers who want to know the price before they say yes, and that's most homeowners. They don't watch the clock or wonder why the tech went to the supply house. The tradeoff is that a quick job doesn't come out cheaper. Presenting a few options at different prices with [good-better-best pricing](https://www.brix.so/learn/good-better-best-pricing) gives them control without haggling over hours.

## Common flat rate pricing mistakes

- **Building the rate from wages.** $30 an hour times a multiplier ignores burden, non-billable time and overhead. Start from cost per billable hour.
- **Using best-case task times.** Book times should reflect a typical job, not your fastest tech on an easy house.
- **Never updating parts prices.** A pricebook built on last year's supplier costs quietly erodes margin.
- **Forcing everything into the book.** Open-ended work priced flat is a gamble. Quote it as a custom job or time and materials.
- **No plan for surprises.** When a seized valve or rotted framing changes the job, stop and get a new approval or [change order](https://www.brix.so/learn/change-order) before continuing.
- **Paying techs hourly and never measuring speed.** If you don't track gross profit per hour, you can't see which techs make flat rate work.

BRIX builds quotes on site from your price list, so techs give the same flat price every time, and follows up any option the customer didn't approve on the spot. Finished jobs turn into invoices automatically.

- [Quotes and estimates](https://www.brix.so/features/quotes-estimates): Builds accurate quotes on site and follows up on every open estimate.
- [Sales automation](https://www.brix.so/features/sales-automation): Follows up every lead and open estimate automatically by text and email, and asks every customer for a review after the job.
- [Invoicing and payments](https://www.brix.so/features/invoicing-payments): Turns finished jobs into invoices and politely chases unpaid ones until the money is in your account.

## Frequently asked questions

### What is flat rate pricing in HVAC and plumbing?

It's charging a set price for each repair or service, decided before the work starts, instead of billing by the hour. The tech diagnoses the problem, looks up the task in the company's pricebook and quotes one total. The customer pays that price whether the job takes less or more time than planned.

### Is flat rate pricing better than hourly?

For repeatable service work, flat rate usually works better for both sides: customers get a firm price and efficient techs earn the company more per hour. Hourly or time and materials is better when the scope is unknown, because a fixed price on open-ended work puts all the risk on you.

### How do you create a flat rate price book?

List your most common tasks from past invoices, set a realistic standard time for each, attach the parts at current cost and your markup, then price labor at your billable hourly rate. Review actual times and parts costs against the book every quarter and update prices when they drift.

### What happens if a flat rate job takes longer than expected?

The company absorbs the extra time and the customer pays the quoted price. That's the deal. The exception is when the job itself changes, such as a broken shutoff valve or hidden damage; then the tech should explain the new problem and get approval for a new price before continuing.

### How much should I charge per hour for HVAC work?

Work it out from your own costs rather than copying a competitor. Divide a tech's burdened hourly cost by the share of hours that are billable, add overhead per billable hour, then divide by one minus your profit target. A $42 burdened tech at 60% billable with $62.50 of overhead per hour needs roughly $177 an hour for a 25% profit on labor.

### Do customers prefer flat rate pricing?

Many homeowners do, because they know the total before agreeing and don't have to watch the clock. The key is a clear explanation of what the price includes. Offering two or three options at different prices also helps customers feel in control of the decision.

## Related

- [What Is Time and Materials Pricing?](https://www.brix.so/learn/time-and-materials)
- [What Is Good-Better-Best Pricing?](https://www.brix.so/learn/good-better-best-pricing)
- [What Is Markup?](https://www.brix.so/learn/markup)
- [What Is Labor Burden?](https://www.brix.so/learn/labor-burden)
- [What Are Billable Hours?](https://www.brix.so/learn/billable-hours)
- [What Is Gross Profit per Hour?](https://www.brix.so/learn/gross-profit-per-hour)
- [Flat Rate Pricing Calculator](https://www.brix.so/tools/flat-rate-pricing-calculator)
- [How Much to Charge per Hour as a Contractor](https://www.brix.so/tools/contractor-hourly-rate-calculator)
- [How to Price Contracting Jobs for Profit: The Complete Guide](https://www.brix.so/guides/how-to-price-jobs)
- [Contractor estimating software that quotes on site and chases every open estimate](https://www.brix.so/features/quotes-estimates)

---
Written by BRIX Editorial Team. Last updated 2026-10-12.
Canonical: https://www.brix.so/learn/flat-rate-pricing