How Much Revenue Should HVAC Techs Generate in 2024?

May 14, 2024

Tagged:: Training,; Coaching,; Technicians,; KPI,; Service,; Compensation

As a HVAC business owner, one of the toughest things to do is to motivate your HVAC technicians to sell more, and to generate more revenue.

Each HVAC technician who works in your business has a dual role of both repairing HVAC equipment, and also selling maintenance agreements, add-on services, and even increasing new HVAC system sales.

One of the most common complaints that HVAC business owners hear from their technicians is that they need to be paid more per hour.

The problem is that most HVAC techs have no idea how to sell, or how to generate more revenue for their company. This means that any extra salary or payment causes the HVAC business to lose money.

The reality is that many HVAC businesses are overpaying their HVAC technicians because they are not priced correctly, or don't know if they are making enough in sales revenue.

This predicament leads to a lot of confusion and miscommunication in the HVAC industry around how much a HVAC technician should earn, and what is a reasonable HVAC revenue per technician.

How Much Revenue Should a Service Tech Generate?

The average revenue that most HVAC techs generate is between $250,000 and $450,000 in annual sales. The average HVAC tech salary in 2024 is $49,500 per year.

Depending upon the number of HVAC service calls the technician is running per day, this means the average ticket (or revenue per call) is approximately $200 per call.

Of course, many HVAC technicians generate much higher revenue amounts of $1,000,000 or even $2,000,000 per year. These HVAC technicians are highly trained as 'selling techs' and focus primarily on HVAC system replacements, and selling add-on equipment.

Most of the HVAC technicians who are part of the SBE HVAC training programs have an average ticket of $650 per call or even higher.

Understanding HVAC Wage to Revenue Ratio

One of the KPIs for HVAC business profitability is the wage-to-revenue ratio for each of your HVAC technicians.

When looking at HVAC service techs, you can look at how much they are paid in comparison to how much revenue they generate, and ideally this number should not be more than 20%.

What is a Good HVAC Wage to Revenue Ratio?

Ideally, all your HVAC technicians will earn between 14% and 20% of the revenue they generate for your company.

Most HVAC technicians will focus on the dollar amount they earn per hour, rather than their salary as a percentage of revenue.

This misunderstanding is why as a HVAC business owner you must be sure you are paying your HVAC technicians correctly to ensure you are profitable.

Are You Paying your HVAC Technicians Correctly?

Many HVAC business owners have no idea if they are paying their HVAC technicians too little or too much. This confusion is caused by not being familiar with the revenue that their service techs are generating, and what the percentage of revenue should be.

For example:

If a HVAC technician that makes $25/hour, their weekly base pay would be $25 x 40 = $1,000 gross wages per week.

$1000 per week would be $52,000 per year.

If we take that $52,000 in salary, and divide it by 20%, we can see that that that HVAC tech would need to bring in $262,000 per year for the wage-to-revenue ratio to be at 20%.

With this math in place, we can look at some average HVAC tech salaries compared to the required revenue.

$40,000 per year HVAC salary = $200,000 annual revenue
$50,000 per year HVAC salary = $250,000 annual revenue
$75,000 per year HVAC salary = $370,000 annual revenue
$100,000 per year HVAC salary = $500,000 annual revenue

These average HVAC technician revenue numbers do not usually account for additional spiffs or commissions, which should ideally be built into the cost of the services.

Are Your HVAC Techs Underpaid or Overpaid?

If your HVAC tech is not currently generating adequate revenue that allows you to pay them between 14% - 20%, then you are likely overpaying or underpaying them.

Because of the competitive nature of the HVAC industry, there are many HVAC technicians who will ask for higher salaries than their earnings justify, which means a lot of HVAC technicians are currently overpaid for what they generate.

Usually the reason that a HVAC business owner is overpaying their service techs is one of three elements:

1. Incorrect or Outdated HVAC Pricing
2. Low HVAC Technician Productivity
3. Poor HVAC Sales Per Technician

All three of these problems are very common in the HVAC business world. All three need a clear strategy and a good understanding of how to manage a HVAC business for profitability

Most HVAC business owners have never look at their pricing or gross margin closely and thought about whether they are priced correctly.

On top of this, many HVAC technicians are doing too many calls per dayn during the HVAC busy season, and are not doing enough during the HVAC slow season.

Having good HVAC business systems, a clear HVAC maintenance agreement client base, and trained HVAC technicians will help to overcome the issue of overpayment of HVAC technicians.

How Do HVAC Techs Make More Money?

The reality is that most HVAC technicians will want to earn more money year after year.

However, rather than simply raising their hourly rate by a few dollars, it is far better to train a HVAC technician to be a better sales person.

If a HVAC service tech is able to sell, they will typically cap out their earnings at an 18% wage-to-revenue ratio. This is why the average HVAC tech earns less than $50,000 per year.

However, it doesn't have to be this way.

By offering proper incentives, and training your HVAC team, you can begin to reward your HVAC technicians and raise their salary.

Many HVAC technicians who earn more than $50 per hour ($104,000 per year) are able to do it by selling maintenance agreements, upselling add-ons such as IAQ or Duct Cleanings, or even selling new HVAC systems.

And here's the good news for the business owner: when a HVAC selling tech that is compensated with the correct compensation, it is possible to have them around a 14% wage-to-revenue ratio... which means a lot of extra profit for the HVAC business owner.

How Much Revenue Should a Service Tech Generate?

Are Your HVAC Techs Underpaid or Overpaid?

Need to Train your HVAC technicians to generate more revenue?