HVAC Tech Commission & Spiff Pay Plans (2026)

Pay plans decide more than payroll. They decide what your techs do when nobody is watching: whether they rush the tune-up to catch the next call, whether they recommend the repair the customer actually needs, and whether they stay with you for a few extra dollars an hour from the shop down the road. Here's a plain look at the common ways HVAC owners pay service techs and comfort advisors, where each one goes wrong, and the federal overtime rule that trips up a lot of shops that add commissions or spiffs.

This guide is general information, not legal or tax advice. State wage laws can be stricter than federal law, so have your payroll provider or an employment attorney check your plan before you roll it out.

The four common pay structures

1. Straight hourly

The tech gets an hourly rate for every hour worked, plus overtime.

• Pros: Simple to run and explain. Easy to budget. Nobody has a reason to push a sale, which helps with trust and with newer techs who are still learning.
• Cons: No direct reward for doing more or doing it better. Your best tech and your slowest tech look the same on a paycheck unless you raise rates, so strong techs may leave for a shop that pays for output.
• Fits best: Apprentices, install helpers, and shops that want a pure service culture.

2. Hourly plus spiffs

Hourly base, plus a fixed bonus ("spiff") for specific events: selling a maintenance agreement, generating a system replacement lead that closes, an add-on like a surge protector or air purifier, or a strong customer review.

• Pros: Keeps the security of hourly pay while rewarding the behaviors you care about. Easy to aim: spiff what you want more of.
• Cons: Techs chase whatever is spiffed. If you spiff one add-on heavily, expect to see it on a lot of tickets. Spiffs also pile up over time and become hard to take away.
• Fits best: Most service departments. It's the easiest step up from straight hourly.

3. Commission (percent of sales or percent of gross profit)

The tech or comfort advisor earns a percentage of what they sell. Some shops pay commission only; many pay a base (hourly or a draw) plus commission.

• Percent of sales is simple: the bigger the ticket, the bigger the check. The problem is that it pays the same whether the job was profitable or not, so it quietly rewards discounting, throwing in extra parts, or selling jobs that eat your margin.
• Percent of gross profit (sales minus parts, equipment, and sometimes labor cost) ties the tech's pay to what the shop actually keeps. It's harder to explain and requires clean job costing, but it removes the reward for giving margin away.
• Fits best: Comfort advisors on replacement sales, and experienced service techs in shops with solid pricing and job costing.

4. Flat-rate or piece pay

The tech is paid a set amount per task (for example, a fixed amount per tune-up or per repair code in your price book), regardless of how long it takes.

• Pros: Rewards speed and skill. Pairs naturally with flat-rate customer pricing.
• Cons: Rewards speed, sometimes at the cost of quality. Callbacks and skipped steps become the risk you have to manage. Slow days mean small paychecks, which hurts retention. And it still has to satisfy minimum wage and overtime rules (see below).
• Fits best: Experienced techs who want to control their earnings, with a callback policy in writing.

If you're deciding how to price jobs to customers in the first place, our flat rate vs. time and materials guide covers that side.

How to keep commission from turning into overselling

Any pay tied to sales creates pressure to sell. That pressure is fine when it pushes techs to explain options they would otherwise skip. It's a problem when customers start feeling pushed or getting work they don't need. A few guardrails owners use:

• Pay on gross profit, not just sales, so there's no reward for discounting or padding parts.
• Clawbacks for callbacks and refunds. If the job comes back or the customer cancels, the commission comes back too. Put it in writing before day one.
• Present options, don't pick for the customer. A standard good-better-best presentation on every qualified call makes the process the same for every customer. See our good-better-best pricing guide.
• Watch the outliers. A tech whose close rate or average ticket is far above the rest of the team is either very good or cutting corners. Ride along, pull photos, and call a few customers.
• Reward quality, not just revenue. Spiffs for reviews, low callbacks, or membership renewals balance out pure sales pay.
• Keep diagnostic honesty non-negotiable. Make it clear that recommending unneeded work is a firing offense, no matter the numbers.

The overtime rule most commission plans get wrong

Under the federal Fair Labor Standards Act (FLSA), non-exempt employees must get overtime pay of "not less than time and one-half the regular rate of pay for all hours worked over 40 hours in a workweek." The regular rate isn't just the hourly rate. The Department of Labor defines it as total compensation for the workweek (minus a short list of statutory exclusions) divided by total hours worked in that workweek, and notes that earnings may be set on a piece-rate, salary, commission, or other basis, "but in all such cases the overtime pay due must be computed on the basis of the average hourly rate derived from such earnings." Source: U.S. Department of Labor, Wage and Hour Division, Fact Sheet #56A: Overview of the Regular Rate of Pay Under the FLSA (Dec. 2019)

Commissions specifically are covered by federal regulation: "Commissions (whether based on a percentage of total sales or of sales in excess of a specified amount, or on some other formula) are payments for hours worked and must be included in the regular rate." That applies whether the commission is the tech's only pay or on top of hourly pay, and no matter how often it's computed or paid. Source: 29 CFR § 778.117, Commission payments—general (via Cornell Legal Information Institute)

The same DOL fact sheet says a bonus can be left out of the regular rate only if both the fact that it will be paid and the amount are at the employer's sole discretion. A spiff that techs are promised in advance for hitting a defined target is not that kind of bonus, so treat it like a commission and include it. In plain words: if your non-exempt tech works overtime in a week they earned commissions or promised spiffs, the overtime rate goes up. Paying overtime on the hourly rate alone underpays them. The same goes for on-call stipends; see HVAC On-Call & Overtime Pay: What the Law Requires for on-call time, drive time, and call-out minimums.

Worked example (illustrative only)

These are made-up round numbers to show the math, not a recommended pay rate or commission percentage.

A non-exempt service tech is paid $25/hour and works 45 hours in one workweek. That week they also earn $300 in commissions and promised spiffs.

1. Straight-time pay for all hours: 45 x $25 = $1,125
2. Add commissions/spiffs: $1,125 + $300 = $1,425 total compensation
3. Regular rate: $1,425 / 45 hours = $31.67/hour (rounded)
4. Overtime premium owed on top of straight time: half the regular rate for each overtime hour, so $31.67 / 2 = $15.83 x 5 hours = $79.17 (using the unrounded rate)
5. Total pay for the week: $1,425 + $79.17 = $1,504.17

The common mistake is paying overtime on the hourly rate only: (40 x $25) + (5 x $37.50) + $300 = $1,487.50. That's $16.67 short for one week, one tech. Small on one paycheck, but it adds up across a crew and a busy summer.

The same thinking applies to the commission itself. Here's how the two commission bases treat two $1,000 repair tickets (again, made-up numbers):

Percent of sales pays the same on both jobs even though Job B made the shop $300 less. Percent of gross profit pays less on the thinner job, which is the behavior most owners want. Run your own jobs through the free HVAC job profit calculator before picking a percentage, so the commission comes out of real margin rather than hoped-for margin.

Side-by-side: one tech, four pay plans (made-up example)

Every number here is a made-up example to show the math, not survey data or a recommended rate. Swap in your own rates and ticket history.

The example tech: a non-exempt service tech who bills $7,000 in a busy week (45 hours) and $3,500 in a slow week (40 hours). Four ways to pay them:

• Straight hourly: $30/hour.
• Hourly + spiffs: $27/hour, plus $25 per maintenance agreement sold and $100 per replacement lead that closes. That comes to $200 of spiffs in the busy week (4 agreements, 1 closed lead) and $50 in the slow week (2 agreements).
• Commission with an hourly floor: 20% of sales, but never less than $18/hour for hours worked.
• Hybrid: $20/hour base plus 8% of sales.

Overtime premiums use the regular rate from the section above: for example, hourly + spiffs is $1,415 / 45 = $31.44, and half of that times 5 hours = $78.61. "Labor %" here is the tech's gross wages divided by the revenue they billed that week. It leaves out payroll taxes, workers' comp, and benefits, so your true cost is higher; the free HVAC labor burden calculator adds those back.

What the table shows. Over the two weeks together ($10,500 billed), three of the plans land in the same place: about $2,621 to $2,625 of pay, or 25.0% of revenue. Commission with a floor pays $2,197.78 (20.9%), about $427 less, and almost all of that gap is the slow week. That's the whole trade-off in one line: commission moves slow-season risk from the owner to the tech. The owner's labor cost stays steady as a percent of revenue; the tech's paycheck drops 51% from the busy week to the slow week. Under straight hourly it's the reverse: the tech's pay barely moves and the owner's labor percentage jumps from 20% to 34% when the phones go quiet.

Which plan fits which shop

• Straight hourly if you're training apprentices, your pricing or job costing isn't solid yet, or trust is the thing you sell. You carry the slow-week cost, so price for it.
• Hourly + spiffs if you want a first step toward paying for results without scaring off your current crew. Spiff two or three things you actually want more of, and review the list yearly.
• Commission with a floor for experienced techs and comfort advisors who want upside, in shops with steady slow-season call volume (a strong maintenance-agreement base helps).
• Hybrid if you want techs to share in results but still get a livable paycheck in the slow season. It's the most common compromise and the easiest to model against last year's real jobs.

Pitfalls that cost owners money

• Commission-only still has to meet minimum wage each week. The FLSA sets the federal minimum at $7.25 an hour (29 U.S.C. § 206), and federal rules say a single workweek is the standard, with no averaging across weeks, and that this applies to "employees paid on a commission basis" (29 CFR § 778.104). Made-up example: a commission-only tech at 20% who bills $1,000 in a 40-hour week earns $200, or $5.00 an hour. You owe at least $90 more that week to reach $290 (40 x $7.25), and a great week later doesn't make up for it. Many states set a higher minimum, so check yours. A written hourly floor like the one in the table solves this.
• Weekly commission goes into that week's overtime math. Per 29 CFR § 778.118, commission paid weekly is added to the week's other earnings, divided by total hours, and the tech gets half that rate for each overtime hour.
• Monthly or delayed commission still counts. If you can't figure commission until after payday, you can pay overtime on the hourly rate first, but once the commission is known you must spread it back over the weeks it was earned and pay the extra overtime (29 CFR § 778.119). Payroll software won't always do this for you.
• Draws need written rules. If you advance a draw against future commission, spell out in writing what happens when commission falls short, and have your payroll provider confirm it works under your state's wage law before you start.

Rolling out a new pay plan

• Model it on last year's real jobs first. Would your best tech have made more or less? If a good tech loses money under the new plan, expect them to leave.
• Put it in writing with examples, clawback rules, and when commissions are paid.
• Give a transition period, such as a guaranteed floor at their old pay for the first few months.
• Review it every year. Pricing changes, and a plan that was fair last year can drift.

Getting pay wrong is expensive in both directions: underpay and your techs leave, overpay and the margin disappears. Put a number on the first risk with the free HVAC technician turnover cost calculator.

Related guides and tools

• For national pay bands, the tech shortage, and what turnover costs, read HVAC Tech Pay & Hiring Benchmarks 2026.
• For what techs earn in your state, see HVAC Technician Salary by State 2026.
• To compare a week of pay and shop cost under straight hourly, commission, and a hybrid (hourly floor or base plus commission), with overtime on the regular rate built in, use the free HVAC tech pay plan calculator.
• The job profit calculator and turnover cost calculator are free and don't need an email.

Before you change plans, see how your tech pay and labor cost stack up against other shops in the anonymous Owner Numbers benchmark.