Pricing electrical work is both art and science. Charge too little, and you’re working for free. Charge too much, and you lose bids to competitors who might be losing money without knowing it.
Here’s how to price electrical work correctly—with real numbers, not guesswork.
What Should Electrical Contractors Charge?
Let’s start with market rates, then work backward to margins.
Hourly Rates by Work Type (2026)
| Work Type | Market Rate Range | Average |
|---|---|---|
| Residential service calls | $85-$150/hr | $115/hr |
| Residential new construction | $65-$95/hr | $78/hr |
| Commercial service | $95-$175/hr | $135/hr |
| Commercial new construction | $75-$120/hr | $95/hr |
| Industrial/specialty | $125-$225/hr | $165/hr |
Note: These are billing rates, not what techs are paid. The spread covers overhead, profit, and risk.
Flat Rate vs. Hourly: Which Is Better?
Flat rate works best for:
- Residential service
- Defined scope work (panel upgrades, outlet additions)
- Repeat job types
Hourly/T&M works best for:
- Commercial service with variable scope
- Troubleshooting where duration is unpredictable
- Consulting and design work
Most profitable electrical shops use flat rate for residential service and T&M with clear estimates for commercial work.
Profit Margin Targets for Electricians
Residential Electrical
| Metric | Target | Top Performers |
|---|---|---|
| Gross Margin (Service) | 45-55% | 55-62% |
| Gross Margin (Remodel) | 35-45% | 45-50% |
| Net Margin | 12-18% | 18-25% |
| Revenue per Tech/Day | $1,200-$2,000 | $2,000-$3,000 |
| Average Service Ticket | $350-$550 | $500-$800 |
Commercial Electrical
| Metric | Target | Top Performers |
|---|---|---|
| Gross Margin (Service) | 40-50% | 50-58% |
| Gross Margin (Projects) | 25-35% | 35-42% |
| Net Margin | 10-16% | 16-22% |
| Revenue per Crew/Day | $2,500-$5,000 | $5,000-$8,000 |
New Construction Electrical
| Metric | Target | Top Performers |
|---|---|---|
| Gross Margin | 22-32% | 32-38% |
| Net Margin | 6-12% | 12-18% |
| Revenue per Crew/Day | $3,500-$6,000 | $6,000-$10,000 |
New construction has lower margins but higher volume predictability. The best new construction electricians win on efficiency, not price.
Building Your Electrical Pricing
Step 1: Calculate Your True Labor Cost
Your journeyman makes $32/hour. Your actual cost?
Base wage: $32.00
FICA employer portion (7.65%): $2.45
State/federal unemployment (~3%): $0.96
Workers compensation (~8%): $2.56
Health insurance (per hour): $4.00
Paid time off (vacation/sick): $2.50
Training/non-billable time: $2.00
Vehicle (per tech hour): $3.00
─────────────────────────────────
Total burdened rate: $49.47/hour
Reality: Your $32/hour electrician costs you nearly $50/hour.
If your billing rate is $85/hour and it takes 2 techs 3 hours, you’ve collected $510 and paid out roughly $300 in labor alone—before materials or overhead.
Step 2: Determine Overhead Per Job
Monthly overhead for a typical 5-8 person electrical shop:
| Category | Typical Monthly Cost |
|---|---|
| Rent/warehouse | $3,000-$6,000 |
| Vehicles (payments, insurance, fuel) | $4,000-$8,000 |
| General liability insurance | $1,500-$3,000 |
| Office staff/admin | $5,000-$10,000 |
| Tools and equipment | $1,000-$2,000 |
| Software (dispatch, accounting) | $500-$1,500 |
| Marketing | $1,500-$4,000 |
| Phone/internet/utilities | $500-$1,000 |
| Professional services | $500-$1,500 |
| Total | $17,500-$38,000 |
Let’s say $28,000/month overhead, completing 60 jobs/month:
Overhead per job = $28,000 ÷ 60 = $467
Every job must contribute $467 before you make profit.
Step 3: Calculate Job Floor Price
Example: Panel Upgrade
| Cost Component | Amount |
|---|---|
| Materials (panel, breakers, wire) | $850 |
| Labor (2 techs × 6 hours × $49) | $588 |
| Permit | $125 |
| Overhead allocation | $467 |
| Total Cost | $2,030 |
At this cost, you break even at $2,030. No profit.
Step 4: Apply Target Margin
For a 40% gross margin on this install:
Price = Total Cost ÷ (1 - Target Margin)
Price = $2,030 ÷ 0.60 = $3,383
If you’re charging $2,800, you’re making 13% gross margin. After overhead? You’re probably losing money.
Common Electrical Pricing Mistakes
1. Using Base Wages for Estimates
Every estimate based on $32/hour instead of $49/hour is 35% underpriced from the start.
2. Not Charging for Windshield Time
If your tech drives 45 minutes to a job and 45 minutes back, that’s 1.5 hours of paid time not in your estimate.
Fix: Build drive time into your flat rate, or charge a dispatch/trip fee.
3. Quoting Materials at Cost
Your material handling has real costs:
- Time to order/pick up
- Inventory carrying cost
- Delivery coordination
- Returns and restocking
Markup guidelines:
| Material Cost | Markup |
|---|---|
| Under $50 | 75-100% |
| $50-$500 | 35-50% |
| $500-$2,000 | 25-35% |
| Over $2,000 | 15-25% |
4. Bidding Projects Without Contingency
Electrical projects have variables: wall conditions, existing wiring quality, permit delays, scope changes.
Build in 5-10% contingency on project bids. Call it “unforeseen conditions” allowance. Most jobs will use it; when they don’t, you keep the margin.
5. Ignoring Your Close Rate
If you close 50% of proposals, your estimating time on the other 50% is a cost.
Example: You spend 2 hours on each proposal (site visit + estimate). At 50% close rate, each won job cost 4 hours of estimating time.
At $75/hour blended cost, that’s $300 per job in sales cost—which belongs in overhead or the job price.
Electrical Pricing Strategies
Diagnostic Fee Model
Charge $89-$149 for diagnosis, waive if proceeding with repair.
Why this works:
- Stops tire-kickers
- Compensates for no-sale visits
- Doesn’t hurt serious customers
Good-Better-Best Proposals
For larger jobs (panel upgrades, generators, rewires):
| Option | Description | Margin |
|---|---|---|
| Good | Basic code-compliant solution | 30% |
| Better | Quality brand, longer warranty | 38% |
| Best | Premium equipment, full warranty, enhancements | 45% |
Anchor with the best option, but make “better” your expected sale.
Maintenance Programs
Recurring revenue for electricians often means commercial:
- Monthly electrical inspections
- Emergency response priority
- Thermal imaging scans
- Panel maintenance
Price for:
- 2-4 visits/year × labor cost
- Emergency response value
- 50%+ margin target
Tracking What Matters
Track these weekly/monthly:
| Metric | Why It Matters |
|---|---|
| Revenue per tech per day | Measures productivity |
| Gross margin by job type | Identifies losers |
| Close rate by job size | Shows pricing alignment |
| Average ticket | Trends reveal pricing issues |
| Callback rate | Hidden cost indicator |
The Math Doesn’t Lie
Here’s the uncomfortable truth: most electrical contractors who are “busy but not profitable” have a pricing problem, not a sales problem.
They’re winning work they shouldn’t win—because they’re priced below where they should be.
The fix:
- Calculate true costs (burdened labor + materials + overhead)
- Set margin targets by job type
- Price accordingly
- Track actual margins vs. expected
- Adjust quarterly
It’s not complicated. It just requires doing the math.
Free Tool: Profit Margin Calculator
We built a calculator that does the math for you. Enter your costs, see your real margins, and get the pricing you need.
Open the Profit Margin Calculator →
Or download our Job Costing Template to track margins on every job.
Need Operational Help?
If pricing is just one of several broken systems in your electrical business—hiring, scheduling, cash flow, delegation—we help trade businesses fix the underlying operations.
Schedule a free consultation → to see if we’re a fit.
Related Pricing Guides
Compare pricing approaches across trades:
- How to Price Plumbing Jobs — Complete markup and margin guide for plumbers
- HVAC Profit Margins Guide — Benchmarks and pricing for HVAC contractors
- Roofing Contractor Pricing Guide — Storm work, retail, and commercial roofing margins
- Landscaping Pricing Guide — Maintenance contracts and installation pricing
- General Contractor Pricing Guide — Sub markup, change orders, and bid strategies for GCs