How to price electrical work

The rate you charge per hour is not the rate you pay per hour. It has to carry three things: the technician's wages and burden, the share of overhead each billable hour has to cover, and the profit the business needs to keep. Skip the overhead and the truck, the insurance, the office, and the hours nobody bills for get paid out of margin.

1. Wages plus burden. Hourly pay, payroll taxes, workers' comp, benefits. For most shops burden adds 25–35% to the wage.
2. Overhead per billable hour. Add up a year of overhead — rent, vehicles, fuel, insurance, software, phones, office pay, advertising — and divide by the hours you actually bill in a year, not the hours you are open. A one-truck shop rarely bills more than 1,200–1,400 hours.
3. Profit. Decide the net margin the business needs and add it on top. Profit is a line item, not what is left over.

Wages and burden of $48/hr, overhead of $60 per billable hour, and a 20% profit target lands near $135/hr. The hourly rate calculator runs this math with your own numbers.

The material on a job should be priced at what it costs to replace it today, not what you paid for the stock on the truck. Copper, wire, and breakers are repriced by suppliers month to month; if the quote uses a price from the last time you stocked up, the next purchase order closes the gap out of your margin.

Two habits fix this. First, keep the material list current — check the supply house price on the items you use most at least monthly. Second, apply markup to material as its own line, separate from labor. Material markup covers the cost of sourcing, stocking, handling, and warranting the parts; 25–50% is common in residential service, with higher markup on low-cost items and lower on big-ticket ones. It is not profit on top of the labor rate — the two cover different costs.

Time and materials bills the hours worked at your rate plus the materials at marked-up cost. It is the right fit for diagnostic work, open-ended troubleshooting, and jobs where the scope is not known until the wall is open. The customer carries the risk of a long job; you carry the risk of a slow technician looking expensive.

Flat rate gives the customer one price for a defined task before the work starts, built from the same three inputs — material at replacement cost, the labor hours the task takes, and your markup. It is the right fit for repeatable service work: a panel change, a circuit install, a receptacle upgrade. The customer gets certainty; you get paid for the task rather than the clock, which rewards a fast, experienced technician.

Most service shops run both: flat rate for the jobs they do constantly, time and materials for everything else. The mistake is not the model — it is a flat rate task built once and never repriced, which quietly turns into last year's material cost with this year's labor.

Illustrative numbers — put your own costs in. A residential 200-amp panel replacement, like-for-like, service entrance intact.

Quoted as flat rate, the customer sees $1,838 before work starts. Quoted as time and materials, the same job at the same rate lands in the same place if it takes six hours — and higher if it takes eight. Either way the number only holds if the $650 material line is what the panel and breakers cost this month. Run it with a panel price from eighteen months ago and the markup line shrinks to cover the difference.

Everything above is a one-time setup except the material side, which drifts every month. That is the part most shops stop maintaining. AccuPrice maintains it: 1,400+ individual material items with prices updated monthly, your labor rate and markup applied, and assemblies that reprice themselves when the items underneath them move. Everything else in this guide stays your call. See what each plan includes.