How to Price Handyman Jobs for Profit [Includes Formula]

1. Choose a pricing strategy: hourly vs. flat rate

It is a good idea to be flexible in how you charge your clients. It shows the customer you’re willing to accommodate their needs while ensuring your business is properly paid for the services.

Depending on the size of the job, the difficulty of the job, the time you expect the job to take, and the materials needed, an hourly rate or flat rate can be beneficial to the client and to your bottom line.

Hourly rate

Charging for your handyman services by the hour is an effective way to control your time and costs. Jobs can be complex or unpredictable, so you don’t want to get caught with a flat rate if you uncover additional work that adds significant time to the job.

The downside is that if a job is finished more quickly than expected, you are not getting paid for as much time as you estimated.  

“As I charged more, sometimes the needs of the customer actually got easier. When I was doing $50 to $75 an hour sometimes I would work with a customer and they’d have a big punch list of things they would want to have completed. Their aims were ‘I want to get as much out of this handyman as I can get,’” says James Droste of My Handyman James in Austin, TX.

“But as soon as I started to increase the price, I found that my customers were more understanding about just one or two simple tasks completed per hour.”

Flat rate

Charging a flat rate is more about your time than anything. It is common for larger jobs because they can be harder to estimate the time to completion, but it can also be used for simple tasks because you likely won’t run into any surprises.

Flat rates are often inflated above your hourly rate to leave room for additional material or labor costs, should that happen.

For example, you might charge $50 an hour to replace a leaky faucet, but if the job takes you only 1.5 hours, you can only bill for $75. On the other hand, you may charge a $120 flat rate which includes materials and labor and ensure you are being paid a full amount. 

Depending on the job, it can be more beneficial for the customer and more profitable for your handyman business to charge by either an hourly rate or a flat rate.

READ MORE: Flat Rate vs. Hourly Rate: Making the Right Choice for Your Business

2. Calculate your expenses

Your hourly rate or flat rate depends on a variety of different things. From costs to average hours, you need to get out a calculator and figure out what you need to make to turn a profit.

Determining your expenses

Expenses can be divided into two different categories: personal and professional.

Your personal expenses are things like your personal mortgage or rent, bills, vehicle payments, etc. Calculate these amounts by tracking your monthly bills and living expenses.

Business expenses (also known as overhead) are things like tools, business cards, a vehicle, a business cell phone, or client management software. You can calculate these costs by using an expense tracker, which can be used to track both office expenses, like software, or on the job costs, like a part or tool.

You need to know these amounts if you are going to set a rate that brings in enough money to cover them.

Estimating taxes

As a self-employed handyman, you’ll need to pay both federal income and self-employment taxes. And, depending on where you live, you may need to pay state income tax and other amounts as well.

Since your income taxes are based on how much you make each year, how much you need to pay in taxes will vary.

If you need a hand figuring out how much to calculate for taxes, try talking to your state’s department of revenue or contacting an accountant.

Knowing how much you need to pay in taxes will influence your rates.

3. Estimate how long the job will take you

Consider the number of hours (or days) the project will take you to complete. Then add a buffer of an hour (or more, depending on the job) to make sure you stay profitable.

The more jobs you take on, the more accurate you’ll be with this step. You can also use time tracking software to track your hours for each job and average them out over time to get an idea of what you can expect.

4. Calculate how much you’ll charge customers

With an understanding of your expenses, labor costs, handyman rates and goal profit margin, you’re ready to accurately price your services in order to continue to grow your business. 

Start by tallying up your total expenses with this formula:

Total Expenses = Personal expenses + business expenses + taxes

Next, add your labor costs to determine how much the job will cost you to complete. Here’s the formula you can use:

Cost to complete a job = Total expenses + Labor costs (estimated time to complete)

Finally, use this handyman pricing formula to determine the final amount you’ll charge your customer:

Your pricing = (Cost to do a job + hourly/flat rate) x goal profit margin

“Establishing a strong pricing structure that says, ‘hey, I am worth this much money,’ sends a message that you believe in your work and that you know you’re a person of quality,” Droste says.

FREE TOOL: Try our free service price calculator

5. Research competitor pricing

Now that you know your pricing, look into what different competitors are charging in your community. This will help you to get a feel for whether your pricing is too high, too low, or on par.

You’ll probably see a large range of different pricing. It’s important to pay attention to the differences between who is charging low and high rates.

The handymen on the lower end of the scale may be less experienced or new, while those in the higher end of the scale may have established businesses with years of experience in several fields, like carpentry and remodeling.

Ideally, you’ll want to try to set your own prices somewhere in the middle. If you charge too low, you may not be able to cover your own expenses. If you charge too high, you may overvalue your services and miss out on customers.

Factors that influence handyman pricing

There are a lot of things that go into pricing a handyman service, and being prepared for all the variables helps you make sure you’re charging enough to reach your profit goals.

Here are some factors that could influence your pricing:

• Scope of work: Some jobs require specialized skills and longer timelines to complete
• Materials: Cost of materials fluctuate from time to time, as well as the quality requested by the customer
• Labor time: The longer a job takes, the more labor you need to cover in your costs
• Location: Travel time factors into your costs, and some handyman charge a travel fee
• Experience: More seasoned handyman may charge more for their services
• Market demand: Between regional or seasonal demand, prices change based on the need for your handyman services
• Job urgency: Emergency work or requests for services outside of regular working hours can increase your price
• Customer requests: Special client requests can change timing and complexity of a job

Offering discounts to customers

You can offer discounts for a number of different reasons, but when you do, you need to make sure that you don’t end up losing money on a job.

Discounts only really make sense in certain situations, such as:

• Group rates for neighbors or communities
• Service packages

Group rates

Offering group rates to specific neighborhoods or communities can be a great way to bring in new business and get your handyman business name out there. You can even structure them to encourage large groups to participate by offering additional discounts based on more customers.

For example, you could do something like this: 10% off services for a minimum of 10 customers, but 15% off for a minimum of 15.

This helps to make sure that the number of customers you get can offset the discount that you offer.

Service packages

Service packages are perfect for making additional profit. Often, handymen offer easy, common services as an addition to a larger service at a discounted price.

For example, you might charge full price to install holiday lights on one level but offer a discounted price for a second level or fence.

What kind of service package you choose to offer depends on the skills you decide to offer and the type of clients that you focus on. Just be sure to plan out your service packages in advance so that you can use them as upsells when you create an estimate or send a quote.

This can also be an ideal way to handle clients who try to negotiate. If possible, stick to your base rate, but offer an additional service at a discounted rate.

This way, you don’t miss out on much-needed income, but the client feels like they’re getting a deal.