Profit is what keeps your plumbing business running and growing. But many plumbers struggle with knowing how much profit they should be making. Charge too little, and you’re barely covering costs. Charge too much, and you risk losing jobs to competitors.
So, what’s the right profit margin for plumbing jobs? Let’s break it down.
1. Understanding Profit Margins in Plumbing
Your profit margin is the percentage of money left after covering all costs. There are two key types:
✅ Gross Profit = (Revenue – Direct Costs) ÷ Revenue × 100
- This is what’s left after paying for materials, labor, and equipment.
- Industry standard: 40% to 60% for plumbing businesses.
✅ Net Profit = (Revenue – All Costs) ÷ Revenue × 100
- This is what’s left after all business expenses, including rent, insurance, admin, fuel, and marketing.
- Industry standard: 10% to 30%.
💡 Example:
If you charge $10,000 for a job and your direct costs (labor, materials) are $6,000, your gross profit is $4,000 (40%).
If your total business expenses are $1,500, your net profit is $2,500 (25%).
2. What’s a Healthy Profit Margin for Plumbers?
While profit margins can vary based on your location, competition, and type of work, here’s a general guide:
| Plumbing Work Type | Gross Profit Margin | Net Profit Margin |
|---|---|---|
| Emergency Callouts | 50% – 70% | 20% – 40% |
| Residential Maintenance | 40% – 60% | 15% – 30% |
| New Construction | 20% – 40% | 10% – 25% |
| Commercial Projects | 25% – 50% | 10% – 20% |
| Large-Scale Developments | 20% – 40% | 5% – 15% |
💡 Tip:
Higher margins are needed for small jobs, while larger jobs have smaller percentages but bring in more revenue overall.
3. Why Your Profit Margins Might Be Too Low
If you’re not making at least 10% to 20% net profit, your pricing or expenses might be off. Here are some common mistakes:
🚨 Underquoting Jobs – If you’re not including all costs (materials, labor, admin, travel), you’re leaving money on the table.
🚨 Not Charging for Variations – If builders or clients ask for extras and you don’t charge, your profit takes a hit.
🚨 Pricing Too Low to Win Jobs – Competing on price alone leads to working harder for less money.
🚨 Not Factoring in Overheads – Insurance, tools, marketing, and vehicle costs should be included in your pricing.
🚨 Material Wastage or Price Increases – Failing to track material usage or adjust for rising costs reduces margins.
4. How to Increase Your Profit Margins
If you’re not making enough profit, here’s how to fix it:
✅ Review Your Pricing – Use a cost-plus pricing model to ensure you’re covering all expenses plus profit.
✅ Charge for Variations – Always get approval for extra work and bill accordingly.
✅ Reduce Material Waste – Track materials properly and negotiate bulk discounts with suppliers.
✅ Improve Efficiency – Invest in estimating software, better scheduling, and streamlined workflows.
✅ Offer Value, Not Just Low Prices – Sell quality, reliability, and expertise instead of being the cheapest option.
Final Thoughts
A healthy plumbing business should aim for a gross profit margin of 40% to 60% and a net profit margin of 10% to 30%. If your profits are too low, review your pricing, reduce unnecessary costs, and ensure every job is priced for profit—not just to win work.
💡 Need help with accurate estimating? SNZ Plumbing Estimating provides detailed cost breakdowns to ensure your quotes are competitive and profitable.