What Percentage of Sales Should Labor Be For Service and Installation?

A Contractor University Member recently utilized the Ask-The-Expert Q&A feature within the member dashboard by submitting the following question and received the response below.

Contractor Question:

“What should labor percentages be for service and installation in a residential HVAC company?”

Contractor University Expert Response:

“For service, labor should run at 22%, measured against the labor sale only—this does not include parts and reflects strictly the retail labor revenue.

For installation, labor should be 9% or less, calculated on a non-burdened basis.

These benchmarks are pulled from the best-performing residential HVAC companies in the industry and are outlined in the KPI chart found in Resource Library Section 4.3.”

Contractor University members can click here to log in to their member dashboard and submit a question through the Ask the Expert portal.

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