How it works
- Monthly wages = hourly wage × paid hours per week × 52 ÷ 12.
- Fully loaded monthly cost = wages + (wages × burden %) + benefits + truck, tools & fuel.
- Monthly revenue = billable hours per week × revenue per billable hour × 52 ÷ 12.
- Gross profit = revenue − parts & materials (revenue × parts %). This is the gross profit before the tech's own cost.
- Net contribution = gross profit − fully loaded cost. During ramp-up, gross profit is multiplied by the ramp-up productivity %; the cost stays the same.
- Payback starts in the hole by the one-time cost, adds the ramp-up contribution each ramp month, then the full-speed contribution each month after, and counts the months until the running total reaches $0. If the full-speed contribution is $0 or less, it never pays back.
- First-year net = −one-time cost + ramp months × ramp contribution + the rest of the 12 months × full-speed contribution.
- Break-even hours = fully loaded monthly cost ÷ (gross profit per billable hour × 52 ÷ 12). Below this many billable hours a week at full speed, the tech costs more than they bring in.
Worked example
With the example numbers above: $28 × 40 hrs × 52 ÷ 12 = $4,853.33 in wages a month. Add 20% burden ($970.67), $500 benefits, and $1,200 for the truck, tools, and fuel, and the tech costs $7,524 a month. At 25 billable hours × $150 × 52 ÷ 12 they bill $16,250 a month; after 25% parts that's $12,187.50 gross profit, so at full speed they add $4,663.50 a month.
During the 3 ramp-up months at 50%, gross profit is $6,093.75 against the same $7,524 cost, so each ramp month loses $1,430.25. After the $3,000 hiring cost and 3 ramp months you are $7,290.75 in the hole. At $4,663.50 a month that takes 1.6 more months to make back, so the hire pays for itself in about 4.6 months. First-year net contribution is −$3,000 − 3 × $1,430.25 + 9 × $4,663.50 = $34,680.75. Break-even is $7,524 ÷ ($112.50 gross profit per hour × 52 ÷ 12) = 15.4 billable hours a week.
Drop billable hours to 10 a week with everything else the same and gross profit is $4,875 a month — less than the $7,524 cost. That hire never pays back, no matter how long you wait.
Things this leaves out
- Whether the work is there. Billable hours only happen if you have the calls to fill them. If your current techs aren't full, a new hire splits the same work. The HVAC technician capacity calculator checks that first.
- Overhead that grows. More techs can mean more dispatch, office, and software costs. Add any new per-tech overhead to the truck, tools & fuel line.
- Commission, spiffs, and callbacks. If you pay commission or eat warranty callbacks, raise the parts % or lower revenue per hour to cover them.
- Overtime and seasons. The math assumes a steady month. Busy and slow seasons shift the payback month earlier or later.
- The tech leaving. If they leave before payback, you lose the one-time cost and the ramp-up losses. The HVAC technician turnover cost calculator adds that up.
We don't quote typical tech wages, burden rates, ramp-up times, or revenue per hour here because they vary widely by market and shop. That's what the anonymous Owner Numbers survey collects, so owners can compare against real peers.
Related tools
Not sure you have the work for another tech? The HVAC technician capacity calculator shows how many techs your workload needs, in a normal week and at peak. Need your revenue and cost per billable hour? The HVAC break-even hourly rate calculator works out your fully loaded cost per billable hour. Worried about keeping them? The HVAC technician turnover cost calculator shows what it costs when a tech walks out. Deciding how to pay them? The HVAC tech pay plan calculator compares hourly, commission, and hybrid pay for the same week.