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While it's pretty simple to get an hourly rate that is paid to an HVAC installer, I have found it more difficult to ascertain what the fully burdened rate is. This is the complete cost a company to put that installer on jobs, not including profit. So this rate would include all costs to the company (sometimes described as 'overhead') that are directly related to the employee.

The value of knowing this rate is that if you are having HVAC installation work done, and you know how many person-hours the job takes, then you can get a rough idea of how a quote was built (and so how much mark-up / profit is included in the quote).

For instance, say you ascertain that the equipment and supplies for your HVAC install cost $2,500 and permits and other direct expenses are $500. Also, you know that there will be two people on site for 6 hours, so 12 labor hours. If you knew that the fully burdened rate was, say $150/hr, then 12*150 would be $1800. So without markup, the total with parts and labor comes to $4,800. Adding a fair mark-up for profit, maybe 35%, you come to 1.35*$4,800 = $6,480. So if you get a quote for $8,000, you can back-into their mark-up of 67% and pass on the deal, as that rate is excessive.

I'm sure this rate I'm asking about varies across companies, but the question is about the rate at an efficient, well-run company. What would a reasonable rate be, or range for such a rate?

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  • There is not going to be a single number for this. For example, how do you count the lost 2 hours (the people are only on site for 6 hours) and the travel time and costs. You also need to factor in the time it takes to get jobs. Do you want to count the costs associated with the estimator making 25 bids in a week and only getting your job?
    – StrongBad
    Aug 12 '19 at 21:10
  • If the answer fit in our Q&A format, there'd be a lot more HVAC contractors than there are. Aug 12 '19 at 21:46
  • Unfortunately, "pricing" questions are off-topic here. Aug 13 '19 at 0:09
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Correct me if I'm wrong, but I think the underlying question you're asking is, "how do I determine a fair price for HVAC work?"

Unfortunately, answering that does not involve forensic accounting, as the four things that go into a price (labor, materials, overhead and profit) are all exceptionally (and surprisingly) variable. I wrote a small diatribe on that subject here: Is is appropriate to negotiate price with contractor

So, the same advice I gave on that other question applies here. Get quotes. Try to compare apples to apples. Find a contractor whose sensibilities match yours. If all the quotes come in too high, ask about what you might cut from the quote to get a better price. (Or maybe there's seasonality that can be used to your advantage.)

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  • My former employment was estimating costs, so am familiar with how to do it. My company periodically renewed the labor and burden rates for a "typical" fabrication supplier of components used to build our product. I don't want to pay $30 to find out, but this guy sells a service which must include estimates the hourly rate I'm asking about.
    – Dale
    Aug 13 '19 at 19:35
  • I can imagine that your 30 dollar guy has information that might be useful, but I stand by my statement that labor, materials, overhead and profit are variable. "Typical" is hard to nail down in the world of small hvac installers. Aug 14 '19 at 0:33

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