Plumbing · pricing · fictional example below

Flat rate vs time and materials: which should a plumbing firm charge?

Charge a flat rate for work you have done often enough to predict, and time and materials for work whose scope nobody can see in advance. The difference between them is who carries the risk. On a flat rate the firm pays for a job that runs long and keeps the gain when it runs short; on time and materials the customer does. Either way the price starts from the same thing: what a billable hour costs you. Most plumbing firms need both, chosen by job type.

The two models

What actually differs

	Flat rate (fixed price)	Time and materials
What the customer is told	A price for the job before work starts.	An hourly rate, and materials as used.
Who pays if it runs long	The firm.	The customer, unless the extra time was the firm's fault.
Who gains if it runs short	The firm.	The customer.
What it rewards	Finishing sooner and getting it right first time.	Nothing in particular; a slower job bills more.
What you need to know first	How long this kind of job usually takes, and how far it varies.	Your cost per billable hour.
Where disputes come from	Scope: what was and was not included.	Hours: whether the time on the invoice was needed.

In the UK the same choice is usually described as a fixed price against an hourly or day rate.

Fictional example · Harbour Plumbing & Heating · 2025

620 repairs & call-outs, priced both ways

Harbour Plumbing & Heating is the invented firm in our example report. Its repairs & call-outs brought in £148,400, of which £22,000 was materials, over 1,750 engineer hours. That is £72.23 per hour for labour, or £239.35 per job. Charge every job one or the other and the year's revenue is the same. What changes is which jobs pay.

Jobs, by time taken	Jobs	Average hours	Time and materials bill	Flat rate bill	Flat rate, earned per hour
Quickest quarter	155	1.96	£167.26	£239.35	£109.08
Second quarter	155	2.56	£218.08	£239.35	£80.55
Third quarter	155	3.07	£261.03	£239.35	£65.18
Slowest quarter	155	3.70	£311.05	£239.35	£52.88

Jobs sorted by hours taken and split into four equal groups. Time and materials is hours × £72.23 plus the job's materials. Earned per hour is the flat price less materials, divided by hours. GBP excluding VAT.

On a flat rate the quickest quarter earns £109.08 an hour and the slowest £52.88. That only works if quick and slow jobs arrive in the proportions you priced for. A flat rate set from too few jobs, or from the easy ones you remember, will be too low.

Now suppose the engineers get 10% quicker. On time and materials the firm bills 175 fewer hours and loses £12,640 of revenue for doing the work better. On a flat rate revenue is unchanged and those 175 hours are free for other jobs.

Where a fixed price goes wrong

Hours quoted against hours taken

Job type	Jobs	Hours quoted	Hours taken	Jobs that ran over	Hours over quote	Labour cost of those hours
Boiler replacements	68	1,413	1,500	68%	109	£3,768
Repairs & call-outs	620	1,684	1,750	59%	98	£3,390
Bathroom installations	25	1,044	1,150	76%	116	£3,991
Servicing	430	630	650	61%	33	£1,129

Hours taken include return visits. Hours over quote are counted only on the jobs that ran over. Labour is costed at £34.46 per job hour, the example's field payroll spread over recorded hours.

Per job, bathroom installations overran most: 4.6 hours a job on average, against 0.08 for servicing. A small, repeatable job is safe to price flat. A long job with a wide spread needs either a contingency inside the price or a written scope with extras charged separately. Your own version of this table is the evidence for which job types to fix.

Choosing by job type

Four rules that cover most plumbing work

Use a flat rate whenYou have done the job often enough to know its hours, the scope can be seen before you start, and the customer is comparing prices. Servicing, standard repairs and like-for-like replacements usually fit.

Use time and materials whenNobody can know the scope until the work is opened up: fault-finding, old pipework, leaks behind finishes. A flat price here is a guess, and the guess is your risk.

Split the job whenThe diagnosis is uncertain but the fix is not. Charge a fixed diagnostic visit, then give a fixed price for the repair once you have seen it.

Cap it whenThe customer needs a ceiling and you need protection. Time and materials up to an agreed maximum, with a call before going past it.

Either way

Both prices are built from the same hour

The hourly rate

Start from what a billable hour costs: loaded labour plus its share of overheads. The floor rate guide and overhead per billable hour work both through. Your time and materials rate is that cost plus the profit you need.

The flat price

The same rate × the hours this job type takes on average, travel and return visits included, plus typical materials. Review it whenever your records show the average has moved. What a UK plumbing firm should charge has a worked rate.

The example firm, its jobs and its hours are invented. They show how to compare the two models; they are not a benchmark for UK or US plumbing firms.

See which of your job types are safe to fix.

£400 / $500 · up to 5 years of your jobs · 5 working days · refunded in full if nothing material is found

Your own job history: hours taken against hours quoted for every type, and what each earns per job and per engineer hour.

We’re preparing for our first customers. Explore the example report or email Alex to discuss your business.

Email Alex about a report →