Plumbing
Flat rate vs hourly: why hourly pricing punishes good plumbers
Hourly pricing pays you less the better you get, and it makes customers watch the clock. Flat rate prices the task instead: one price for a toilet rebuild whether it takes 20 minutes or an hour, agreed before you start. Build each price from parts, typical time, drive and overhead, then adjust it as your job records come in.
You rebuild a toilet in 20 minutes because you've done five hundred of them. The customer looks at the bill and asks, "Why does it cost so much? You were barely here." Under hourly pricing, they have a point, and that's the problem. The faster and better you get, the less you make, and the customer spends the whole visit watching the clock.
The hourly trap
Hourly pricing sounds fair. It rewards the wrong thing, though. A plumber who takes an hour and a half to do what you do in twenty minutes earns more on the same job. Your skill, your stocked truck and your knowledge of which part fails on which toilet all work against you.
It also changes how the visit feels. The customer hovers. Every trip to the truck for a part feels like money leaving their account. Every question they ask costs them. And when the bill arrives, the conversation is about minutes, not about whether the toilet works.
- Speed costs you. The faster you work, the smaller the ticket.
- The price is a surprise. Nobody knows the total until the end.
- Disputes are about time. "You were only here 40 minutes" is a hard argument to win.
- Techs get mixed signals. An employee paid hourly and billed hourly has no reason to get faster.
How flat rate flips it
With flat rate, you price the task, not the minutes. A toilet rebuild has one price. It's the same whether it takes 20 minutes or an hour, and the customer says yes to it before you pick up a tool.
Three things change right away. The customer isn't watching the clock, because the clock doesn't matter. There's no surprise at the end, because the total was agreed at the start. And you get paid for skill, not speed: every bit of efficiency you build over the years goes to you instead of the customer's discount.
Flat rate vs hourly on the same job
Here's one toilet rebuild priced both ways, done once by a fast plumber and once by a slow one.
| Scenario | Hourly bill | Flat rate bill |
|---|---|---|
| Fast plumber, 20 minutes on the job | $192 | $279 |
| Slow plumber, 60 minutes on the job | $279 | $279 |
| Who gets paid for experience | The slow plumber | Whoever finishes first |
Example numbers: hourly at $130 an hour plus an $89 trip charge and $60 in parts. Your rates and parts will differ.
The customer pays the same for the same result under flat rate. The fast plumber finishes early and moves on to the next paid job. Under hourly, the fast plumber hands the customer an $87 discount for being good at the work.
Build each price from real numbers
A flat rate price isn't a number you pull from the air or copy from another shop. It's four pieces added together.
- Parts. Your cost from the supply house, plus your markup. Update it when prices move.
- Typical time. Not your best time. The time the task usually takes, including setup, cleanup and the occasional stubborn nut. Use your own job records if you have them.
- Drive. Your average trip, unless you charge a separate service call fee that already covers it.
- Overhead per billable hour. Truck, insurance, tools, phone, software, licensing, divided by the hours you actually bill. Multiply by the task's typical time.
Example numbers
Toilet rebuild: parts cost $30, sold at $60. Typical time on site is 45 minutes. Your labor, overhead and profit target work out to $160 per billable hour, and your average drive adds another 30 minutes.
So 1.25 hours times $160 is $200, plus $60 in parts, for $260. Rounded up for callbacks and the odd bad day, you might list it at $279.
Start with your 20 or 30 most common tasks: faucet cartridges, fill valves, wax rings, disposal swaps, angle stops, water heater flushes. That covers most of what you do. Add tasks as they come up rather than trying to write a thousand-line book before your first job.
When hourly still makes sense
Flat rate isn't right for every job. Some work genuinely can't be priced until you see it.
Flat rate fits
Repeatable service tasks with a known scope: fixture repairs, water heater swaps, drain clearing from a known access point, valve replacements.
Hourly or a diagnostic fee fits
Open-ended troubleshooting, leak detection, remodel work where the plan keeps changing, and commercial accounts that require time and materials in their contracts.
A common hybrid: charge a set diagnostic fee to find the problem, then quote the fix as a flat rate before you start it. The customer still gets a firm price for the repair, and you aren't guessing blind.
Rule of thumb: define what each flat price includes in one sentence. A toilet rebuild covers the tank parts; a cracked bowl, a rotted flange or a seized shutoff is a separate line that the customer approves before you do it.
Track your jobs and adjust
Your first flat rate book will be wrong in places. That's fine. For the first few months, jot down the actual time on each task. If one keeps running long, raise that price. If one is always quick and customers never blink, it may be underpriced too.
Then practice saying the price out loud, because that's where flat rate wins or loses. Our guide to answering "how much do you charge?" covers the phone side. Customers don't hate your price. They hate not knowing it.
Common questions
Won't customers think flat rate is more expensive?
Some will compare your price to an hourly rate and assume so. The answer is that they know the full price before any work starts, and it won't change if the job gets stubborn. Many homeowners prefer that certainty, especially the ones who've been burned by a bill that ran long.
What happens when a flat rate job goes badly?
Sometimes you eat it, and that's part of the deal. Over dozens of jobs the fast ones and slow ones even out, as long as your prices use typical time rather than your best time. What you shouldn't eat is new scope: a rotted flange or a corroded shutoff is its own line item, priced and approved before you do it.
How often should I update flat rate prices?
Look at parts costs whenever your supply house raises prices, and review the whole book at least once a year. Compare your actual time on your most common tasks against the time baked into the price. If a task keeps running long, the price is wrong, not your tech.
Can I use flat rate for drain cleaning?
Yes, and it's common. Many shops price by access point and line type, like a sink drain versus a main line from a cleanout, with camera work as a separate line. Decide ahead of time what happens if the machine can't clear it, so the customer hears that before you start.