Three Methods to Calculate Your Trade’s Service Call Fee

April 9, 2025 | Read: 13 minutes

How do you figure out what your service call fee should cost?

Every contracting business—whether electrical, plumbing, heating or HVAC—will need to have an answer to that question.

However, too few have a consistent pricing structure, which makes answering the question a real challenge…

Without a clear pricing strategy, many businesses run into ad-hoc pricing issues and can be at the mercy of their technicians incorrectly billing clients.

Failing to determine the right price to charge your customers can be costly, but we’re here to help you save time and maximize your profits!

We’ll help you figure out break down all you need to know so you can set prices that work for your business. Explore the blog in full and download our free guide to dive deeper, too.

What is a Trade Service Call?

A service call is a vital task performed by a tradesperson at a customer’s location, usually for checks or repairs. The goal is to ensure an appliance works properly.

These checks may be required by law (for landlords), included in warranty terms, or requested by customers to confirm their installations are safe and efficient.

Service calls are often offered as part of a subscription plan or for a one-time fee.

Common appliances that benefit from regular check-ups include:

Electrical systems
Air conditioning units
Essential systems like fryers or walk-in fridges in restaurants
High-value commercial appliances

Charging the Correct Service Call Fee

Service call fees are typically charged as a one-time fee or included in a subscription plan. Business owners often prefer the former to stay consistent with regulations.

Pricing your service call fee should reflect the value of skilled, professional work—not be a race to the lowest price simply to win over more customers.

Forbes contributor, Kathy Caprino, highlights how undercharging harms both employees and customers. This often stems from mental blocks about charging what your business is worth. Besides, setting low pricing expectations can hurt the industry overall.

Charging the right price allows you to:

Cover your costs
Pay employees competitively
Earn a profit

Success here will ensures your business thrives, keep employees happy, and improve customer journeys, meaning they receive a consistently excellent service.

How to Calculate Your Trade’s Service Call Fee

Part of the challenge for accurately setting prices can come from growth.

For businesses with multiple employees, it’s no longer a case of calculating your service fees based off your own individual living expenses, business expenses, and taxes.

You have a think bigger.

Here are three methods to help you figure out how what service call fee you should be charging and which suits you and your customers:

Method 1: Calculating Your Minimum Service Call Fee (Flat-Rate/Day-Rate)

A service call fee isn’t just a fraction of a day’s work; it’s a specific price that must cover the unique costs of dispatching a technician.

The goal is to calculate your Total Cost Per Billable Hour, which becomes the foundation of your service call fee.

To set a profitable service call fee, you first need to calculate your business’s true cost per hour, then apply the formula below:

Where:

Total Annual Costs: All your labor and overhead expenses for the year combined.
Total Billable Hours: The total number of revenue-generating hours from all your technicians in a year.
Profit Margin: Your target profit as a decimal (e.g., 20% is 0.20).

This single calculation determines the hourly rate that covers every cost in your business and ensures you hit your profit goals.

Use this rate as the foundation for setting your service call fees and flat-rate prices.

Let’s explore an example

What does that look like in practice?

We’ll use the example of a 15-person plumbing business, though for the sake of brevity, we’ve simplified the numbers.

Step 1: Find Your Total Annual Costs

This is everything you spend in a year to run the business.

Total Labor Cost (All Staff): $1,110,000
Total Overhead (Vehicles, Rent, etc.): $388,000
Total Annual Cost: $1,498,000

Step 2: Find Your Total Billable Hours

This is the total number of revenue-generating hours from your technicians.

10 plumbers x 231 days/year x 8 hours/day
Total Annual Billable Hours: 18,480

Step 3: Calculate Your Break-Even Rate

This is the hourly rate you must charge just to cover all your costs.

$1,498,000 (Total Costs) ÷ 18,480 (Total Hours)
Break-Even Cost Per Hour: $81.06

Step 4: Set Your Billable Rate (with Profit)

Add your desired profit margin to the break-even rate. A 20% margin is a healthy target.

$81.06 (Break-Even Rate) + 20% Profit
Your Billable Hourly Rate: $97.27

Step 5: Setting Your Service Call Fee

Your service call fee should cover at least the first hour of a technician’s time.

Minimum Service Call Fee: $99
- This provides a clean, marketable price that covers your calculated $97.27/hr rate.
Recommended Service Call Fee: $149
- This higher price (roughly 1.5x your hourly rate) better covers non-billable travel time, ensuring every dispatch is profitable from the start.

Your own prices may vary, but this should be a useful way to help you figure things out.

Keep in mind the average cost of a service call can range from $40 to $250 depending on various factors and the size of your business.

Method 2: Time and materials pricing

This is more of a retrospective method aimed at larger companies that have already gathered data on their costs and profits.

To start, gather the financial documents that detail the money you’ve earned on a particular job. That can include your receipts, tax documents, or signed contracts.

Calculate the total amount paid for the work you did and the amount of time you spent on them.

Compare your hourly pricing and revenue history:

Is your historical pricing adequate to meet your needs? If not, it’s important to identify why and correct your pricing accordingly.

For example, it could be that you’re often called out to diagnose an asset fault.

It’s key that you make clients aware they’ll pay a call-out charge plus an hourly charge after the first hour. That will make your prices transparent from the beginning.

If you’re afraid that this will upset customers, remember: It’s better to give them an accurate idea of your pricing upfront than to have to chase them for money later.

A “Good, Better, Best” pricing strategy, particularly for service plans, can be incredibly helpful here and help you set expectations and prevent customers from feeling surprised.

Risks of time and materials pricing:

There are a few disadvantages to this style of pricing:

Jobs that greatly exceed the average in terms of time and cost can drive down your profits
Customers can request work “since you’re already here” which weren’t on the quote or invoice which can also affect your average numbers

To overcome this, you’ll need to add in a minimum of 15-25% buffer to the price to give yourself a chance of breaking even on work that causes you a headache.

Good field service management software will come with a feature to help you cover these risks. Usually called additional work orders, this feature will help you ensure time and parts won’t get lost in your paper trail and is easy for staff and customers alike to track.

Method 3: Value-Based Pricing

Here are the basic steps to figuring out how to price your services in regards to what they’re truly worth to your customers.

Know what value means. It’s not just about the time you spend on-site! For example, if you offer a premium customer experience, it should contribute to a premium price.
Set your base hourly rate using your business expenses, desired income, and hours worked (as above).
Figure out pricing that reflects the value of each type of work order. You can charge more for an after-hours emergency call, for example.
Consider other factors that determine customer value. We’ll expand on this below, but think about whether you deliver a niche or specialist service, too.
Put it in writing. A pricing document will ensure your prices are clear to customers.

Read more: Gross Margins Or Net Profit Per Hour?

Understanding the Value of Your Services

1. Know what value means

While there is a mathematical answer to the question: “what should I charge?” There’s also additional elements to consider, such as expertise, peace of mind, and quality that’s a bit more intangible versus parts and time.

This is worth considering.

plumber calculating what his trade service call fee will be

You can discover what your customers value by:

Emphasizing peace of mind: The value of a certified, insured, and highly-reviewed professional who guarantees their work is significant. Customers are often willing to pay more for the assurance that the job will be done right the first time.

Considering their pain points: How much does it cost the customer if this problem isn’t solved? Think of business downtime for a commercial client or property damage from a leak at home. The value you provide is directly related to the cost or distress you prevent.

Highlighting convenience and speed: The ability to offer same-day service for an urgent problem holds immense value, and your price should reflect that availability.

As an example, consider the consequences of being without power in the depths of winter.

A simple faulty wire, which might cost only a few bucks to repair, can leave a customer in a precarious situation.

The value you provide to your clients for a simple fix far surpasses the cost of the materials involved.

2. Set your base hourly rate using your business expenses

Of course, there are industries where the margins are naturally higher compared to the production costs.

What we’re trying to say is that the rest added on top of immediate costs needs to cover everything, from marketing to warehouse rent, to delivery.

The answer to “what should I charge” is to ensure you’re pricing to make a profit.

Going back to the Method 1 example, we mentioned adding a profit percentage to your calculation. Just make sure that what you select is a fair and reasonable amount based on the value of the service you provide.

3. Your trade’s service call fee reflects the value of each type of job

Always consider more than just hourly labor when calculating your charge.

A standard installation inspection with 25 appliances should have a different price from fitting a new alarm system!

Remember, the value to the customer is unrelated to your time.

The value to your customer isn’t how much time you spent, but that they now have a heat pump that won’t break down.

A call-out charge makes sure every job is worth your while, and a standard service charge aligns your price to take into account customer value.

So in your Terms and Conditions, you might state that a standard check-up costs $80.

That makes it crystal clear to the customer that your time has value and will also give you a good margin.

4. Other factors that determine value

What makes it more difficult to understand what should you charge is that many outside factors specific to your business come into play.

The most important is your target market.

For example, where you operate in the country makes a big difference. A city center is more expensive than a small town. Customers will have different means of covering costs and different priorities, especially if they’re a smaller business versus a large company.

No matter the case, people will appreciate planning and flexibility so that there is minimal impact on day-to-day productivity and personal involvement.

It may mean working after-hours, or at weekends when employees aren’t around. Working unsociable hours may mean you can request a higher fee so compensate your technicians.

Still in doubt? You can always check what your competitors are charging for their service calls and react accordingly. Of course, while it’s great to learn from others, keep in mind that you should determine your pricing based on what works best for your business, but it can be useful to help you set a competitive benchmark.

5. Put your service call fee in writing

Your terms and conditions should be an area of your business where it’s worth either spending more time or hiring a contract expert.

Everything from deposits and deferred payments to invoices and charges should be in here.

This way, you know that even if there’s a technical issue with a customer, you’re covered by your T&Cs.

Once you have an hourly rate that reflects the value you offer, write a pricing document with your terms and conditions and make it available to customers.

When you have a professional-looking pricing document, there’s no opportunity for customers to misunderstand and far less confusion internally, too.

How to Chase a Service Call Fee Payment

Now that you know what to charge, it’s important you’re covering all bases so that you can get paid.

After all, there will always be customers who try to wiggle out of a bill, but that doesn’t mean you should make it easy for them.

So how do you politely chase payment in an email without alienating customers?

Well, there’s actually a lot more to it than just listing a price. Remember that:

Phrasing matters! “As per our T&Cs, a 5% interest rate will be charged for each exceeding day.” is a respectful way of reminding the customer they’ll be charged more if they don’t pay their bill, while “Pay now or suffer the consequences.” makes you sound like a mobster
An invoice should be clear. It needs to make sense to the customer, not just to your office manager or a service technician
Urgency is key. When it’s clear that a customer needs to pay soon (as well as what they’re being chased for), they’re much more likely to pay attention.

To give you a head-start on chasing payments, we’ve put together a series of ready-made email templates, which you can copy and paste, then adapt to your situation.

Download The Communication Toolkit now to find out more!

Start Analyzing Your Trade Service Call Strategies!

It’s difficult to calculate the right service call fee for your trade if you don’t know what your current costs are.

The best way to keep track of all your invoices, parts costs, and other outgoings is to manage everything on one screen with the right job costing software.

The good news is, Commusoft’s here to help on both fronts:

First, explore our job management software features, next: download our separate service pricing checklist guide, so you can calculate the prices that’ll benefit your business.