Home Services Profit Margin Benchmarks (2026)
Home Services Profit Margin Benchmarks
What healthy margins actually look like across HVAC, plumbing, electrical, and roofing — drawn from our analysis of 200+ contractor profit-and-loss statements.
The numbers, side by side
Most published margin figures lump all “home services” together, which is useless — a roofing company and an electrical contractor have completely different cost structures. The table below breaks the benchmarks out by trade, based on real, well-run operators in the $3M–$30M range. These are the figures a buyer uses to judge whether a business is healthy.
| Metric | HVAC | Plumbing | Electrical | Roofing |
|---|---|---|---|---|
| Typical gross margin | 45–55% | 50–60% | 52–65% | 35–40% |
| Materials as % of revenue | 15–25% | 10–20% | 10–18% | ~35% |
| Overhead (ex-marketing) | 20–25% | 18–25% | 20–27% | 10–15% |
| Marketing spend | 5–12% | 5–12% | 5–10% | 6–10% |
| Typical net margin (well-run) | 12–22% | 15–25% | 15–22% | 8–15% |
| Average net (most companies) | 5–12% | 5–12% | 8–15% | 5–10% |
The headline: electrical contractors carry the highest margins because the work is the least material-heavy, plumbing and HVAC sit in the middle, and roofing runs structurally lower because materials eat ~35% of every job. Net margin scales with size in every trade — a $20M operator nets far more than a $2M shop on the same gross margin, because overhead spreads across more revenue.
How to read these benchmarks
Three things to keep in mind before you compare your own P&L against these numbers:
Gross margin is not net margin. A 50% gross margin is healthy, but it’s what’s left after overhead that you keep. The gap between gross and net is where most owners lose the money they thought they were making.
Service work and install work are different businesses. A blended gross margin can hide the truth — strong 55–65% service margins dragged down by thinner 35–40% install margins. You have to look at each line separately, not the average.
Size changes everything. The net-margin ranges above are for well-run operators. A small shop at the bottom of a range usually just hasn’t reached the scale where overhead leverage kicks in. The same gross margin produces a much higher net at $15M than at $2M.
These benchmarks come from hands-on analysis of more than 200 contractor P&Ls across the four trades — not survey data or vendor marketing figures. They reflect what we actually see inside the books of home services businesses in the $3M–$30M range.
By the trade
Each trade has its own full breakdown — revenue-tier tables, the great/good/red-flag scorecard, and what separates top performers:
HVAC
Gross 45–55% · Net 12–22% (well-run)
- Service margins carry the business; install is thinner
- Maintenance agreements add recurring revenue
- Net scales hard with size and overhead leverage
Plumbing
Gross 50–60% · Net 15–25% (well-run)
- Higher margins than HVAC across the board
- Flat-rate service drives 60–68% gross on calls
- Subcontracted work (excavation, sewer) shifts the math
Electrical
Gross 52–65% · Net 15–22% (well-run)
- Highest margins of any trade — least material-heavy
- Service & repair targets 62–70% gross
- Project/new-construction work runs lower (8–12% net)
Roofing
Gross 35–40% · Net 8–15% (well-run)
- Materials at ~35% of revenue cap gross margin
- Labor is typically subcontracted (1099)
- Lower overhead partly offsets thinner gross
Where do your margins stand?
If your numbers are below these benchmarks, the gap is almost always one of two things: jobs aren’t priced to the gross margin you think, or overhead has crept up as a share of revenue. A fractional CFO pulls your P&L apart and hands you the highest-impact fixes, ranked by dollar impact.
Benchmark your numbers with a fractional CFO
See exactly where your margins stand against your trade, with a CFO who knows home services:
It starts with clean books
You can’t benchmark margins you can’t see. Accurate, trade-specific bookkeeping is what turns a messy P&L into numbers you can actually manage against — and it’s the foundation every one of these benchmarks is built on.
Get your bookkeeping built for your trade
Clean, current books with job costing and trade-specific categorization: