How to Price Electrical Work
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Price an electrical job from its true cost, then divide by your target margin: price = (materials at cost + burdened labor + permit + allocated overhead) ÷ (1 − target net margin). Every term matters, and the two that get left out most often — labor burden and overhead allocation — are usually a third of the job. Run your own numbers in the free job estimate calculator as you read.
Why electrical is priced differently from other trades
Three things make electrical work its own costing problem. Material is a large, volatile share of the ticket — copper wire, panels and gear can be half the job, and wire pricing moves with the commodity market, so a quote you wrote three weeks ago may no longer be the quote you can afford to honour. Permits and inspections are real time: pulling the permit, meeting the inspector, and the return trip when something needs a correction are hours you pay for and often cannot bill directly. And crews are mixed — a journeyman and an apprentice cost very different amounts per hour and are frequently billed as if they were the same person, in either direction.
The four costs, in order
1. Materials at cost. What the supply house actually charges you, today. Not last quarter's price.
2. Burdened labor. Wages plus what it costs to employ someone: employer FICA at 7.65%, workers' compensation, unemployment insurance, and paid time off. Burden commonly runs somewhere around 25–40% on top of wages, and for electrical the biggest swing factor is workers' comp, which is rated by state and by classification — check your own policy rather than trusting a rule of thumb.
3. Permit and fees. Pass these through at cost. If pulling the permit takes you an hour, bill the hour openly as an administrative line — do not bury profit inside a government fee.
4. Allocated overhead. Rent, trucks, fuel, general liability, licensing, software, phone, the time you spend quoting jobs you do not win. Turn it into a rate: annual overhead ÷ annual billable hours. If your overhead is $130,000 a year and you sell 2,000 billable hours, that is $65 of overhead per billable hour, and every hour you quote has to carry it.
Worked example: a 200-amp residential panel upgrade
One journeyman and one apprentice, ten hours each.
| Line | Working | Amount |
|---|---|---|
| Panel | — | $420 |
| Breakers | — | $260 |
| Service entrance cable & mast | — | $180 |
| Ground rods, connectors, labels, misc. | — | $140 |
| Materials at cost | 420 + 260 + 180 + 140 | $1,000 |
| Journeyman wages | 10 hrs × $38 | $380 |
| Apprentice wages | 10 hrs × $22 | $220 |
| Burdened labor | $600 × 1.30 | $780 |
| Permit | at cost | $150 |
| Allocated overhead | 20 hrs × $65 | $1,300 |
| Total job cost | 1,000 + 780 + 150 + 1,300 | $3,230 |
| Price at a 20% net margin | $3,230 ÷ 0.80 | $4,037.50 |
Quote it at $4,050. That leaves $4,050 − $3,230 = $820 of profit, a 20.2% net margin — after the truck, the insurance and the quoting time have already been paid for, because they were in the overhead line.
Notice what happens if you drop the overhead line and price the same job at cost-plus-20% on materials and labor alone: $1,780 × 1.20 + $150 = $2,286. You would win that job easily and lose about $944 on it.
The markup method, and why it should agree
Many electricians price the other way round — mark the materials up, bill labor at a shop rate, pass the permit through. Same job: $1,000 of material at a 35% markup is $1,350; 20 hours at a $125 billing rate is $2,500; plus the $150 permit gives $4,000. Against the same $3,230 of true cost that is $770 of profit, a 19.25% margin — within a whisker of the margin method. That is the point: the two methods should land in the same place. When they disagree by hundreds of dollars, one of your inputs is wrong, and it is almost always the billing rate or the overhead rate rather than the material markup.
Mistakes that quietly cost real money
- Quoting from the last similar job without re-pricing wire. Copper moves. Put a validity window on every quote — "materials firm for 15 days" is normal and defensible.
- Billing the apprentice's hours at the journeyman rate, or not billing them at all. Both are common; both distort the job. Price each person at their own burdened cost.
- Treating the permit fee as profit. Customers can look up permit fees. Pass it through and charge openly for your time.
- Forgetting the inspection. Waiting for an inspector and driving back for a correction are paid hours. If they are not in the quote, they come out of your margin.
- Double-counting overhead. If your material markup exists to cover procurement and carrying costs, and your overhead rate also includes those costs, you have counted them twice and your quote is high enough to lose bids you should win.
- Using a flat "times three on materials" rule. It happens to work on material-heavy jobs and badly underprices labor-heavy ones like troubleshooting or a rewire.
Decision rules worth keeping
Recompute your overhead rate at least twice a year — it moves whenever you add a truck, a tech, or an insurance renewal. Target net margin is a business decision, not a formula: 10–20% net is a common band for residential electrical, higher for service and troubleshooting work where you carry more risk and more windshield time, lower on large new-construction bids you win on volume. And treat any published hourly figure — including any you find on this site — as a sanity check on your own arithmetic, never as a substitute for it. Rates vary enormously by market, license level and job type.
Quick FAQ
How much do electricians charge per hour?
Billed rates commonly land somewhere around $75–$150+ per hour for residential service work, but the spread by market and license level is enormous, and the figure that matters is the one your own overhead and target margin produce. Work it out from your costs rather than copying a competitor.
What markup should I use on electrical materials?
Commonly 20–50%, with higher markups on small, fiddly items and lower on big-ticket gear. Whatever you choose, check it against the margin method above — if the two answers disagree sharply, you are either double-counting overhead or your billing rate is wrong.
Should I quote flat rate or hourly?
Flat rate for anything you have done enough times to estimate confidently — the customer gets certainty and you keep the upside when you work fast. Hourly (or time-and-materials with a not-to-exceed) for troubleshooting and old-work rewires, where the scope genuinely is not knowable until the walls are open.
Do I bill the customer for the permit?
Yes — at cost, as its own line, plus a stated charge for the time it takes you to pull it and meet the inspector. Hiding profit inside a fee the customer can look up is the fastest way to lose trust on an otherwise good job.
More trades guides: what HVAC contractors should charge per hour · how to write a contractor estimate · what profit margin contractors should target.
Related free tools: job estimate calculator · labor cost calculator · overhead & profit calculator.