How to price electrical jobs in Ontario: charge-out rate, markup and minimum service calls

Price an electrical job by multiplying estimated labour hours by your charge-out rate, adding materials with your chosen markup, and including job-specific costs. Then apply the correct tax. Your charge-out rate must recover the cost of running the business as well as the electrician’s time, or a busy schedule can still lose money.

The worked examples below use Canadian dollars and hypothetical business costs. They are pricing methods, not a claim about the average electrician’s rate in Ontario. MackOps subscription prices, mentioned separately, are in USD.

What is the difference between labour cost and charge-out rate?

Labour cost is what employing someone costs your business. Charge-out rate is what you bill for their work. The gap needs to cover costs that never appear as an hour spent installing something.

Start with wages and your actual employment costs. Then account for the truck, insurance, tools, software, office work and other overhead. Use your own records rather than copying another contractor’s hourly rate.

For an illustrative calculation, assume wages of $38 per paid hour and another $12 in employment costs. That is $50 per paid hour. At 2,000 paid hours, annual labour cost is $100,000.

Now allocate $30,000 in annual overhead and a $13,000 operating profit target to that person’s work. The revenue requirement becomes $143,000. If you expect to invoice 1,300 hours, the calculation is $143,000 ÷ 1,300 = $110 per billable hour.

Those inputs are assumptions, not Ontario wage or payroll benchmarks. An owner working alone still needs to include pay for their own labour. Otherwise, the apparent profit may simply be unpaid wages.

The denominator matters. Paid hours include time you may never invoice directly: preparing estimates, collecting material, training, cleaning the van and handling callbacks. Dividing by every paid hour understates the rate if only some hours produce revenue.

Keep cost recovery consistent. If travel is billed separately, reflect that revenue in your model rather than recovering the same allowance twice without noticing.

What is the difference between markup and margin?

Markup is calculated against cost. Margin is calculated against the selling price. They are different percentages, even when the dollars are identical.

If material costs $250 and you add a 25% markup, the addition is $250 × 0.25 = $62.50. The selling price is $312.50.

The gross margin on that material line is $62.50 ÷ $312.50 = 20%. Calling it a 25% margin would overstate the result.

To achieve a 25% gross margin instead, divide cost by 0.75: $250 ÷ 0.75 = $333.33, rounded to cents. That is a different selling price from adding 25%.

Material markup can help recover purchasing time, handling and other business costs. It does not all become net profit. Decide which costs your labour rate covers and which your material pricing covers, then check the combined job result.

For the examples here, material cost means the cost used in your estimating records, excluding any purchase tax your business can recover. Confirm that treatment with your bookkeeper.

How much is four hours at $110 plus $250 in materials?

Four labour hours at $110 produce $440 in labour revenue. Adding $250 in materials with a 25% markup produces a $752.50 subtotal.

For an HST-registered contractor supplying a taxable Ontario job, the example uses 13% HST. The applicable tax depends on the supply and place-of-supply rules; see the CRA’s GST/HST rate guidance.

This example excludes any ESA notification fee or additional job-specific charge. Add those where applicable before finalizing the tax calculation. Do not hide an omitted fee inside a number that was presented as an all-inclusive quote.

The four hours must also match the scope. State the fixture quantity, access assumptions, included material and whether repairs to finished surfaces are excluded. A correct calculation cannot rescue an incomplete scope.

How should you set a minimum electrical service call?

Set a minimum that covers the smallest visit you can reasonably deliver. Explain what it includes before booking.

As a business-planning example, allow one hour on site, half an hour for travel and a quarter hour for booking and closeout. That is 1.75 hours. At the illustrative $110 rate, 1.75 × $110 = $192.50. You might set a $195 minimum before materials, applicable notification costs and HST.

That is a proposed policy, not a recommended Ontario market rate. Your service area, dispatch pattern and actual costs may produce another number.

Tell the customer whether the minimum includes the first hour on site and how additional time is charged. If it does, do not add that first hour again. A customer should be able to understand the invoice without reconstructing your pricing model.

For troubleshooting, explain what happens if the problem cannot be resolved within the initial allowance. Get agreement on additional work through your current process before expanding the scope.

How do you include an ESA notification fee in a quote?

Identify the notification requirement for the actual work, then use the applicable fee rather than a standard guess. ESA says almost all electrical work requires a notification and it should be filed before work starts. A municipal building permit does not replace it. See ESA’s notification guidance and current fee guide.

If your policy is to pass the fee through at cost, show the actual applicable fee with no markup and retain the supporting record. Price any separately charged administration transparently.

“At cost” does not automatically mean tax-free. The CRA distinguishes ordinary expense reimbursements from amounts paid as a genuine agent for a client. For ordinary reimbursements, the expense generally forms part of the consideration for the service. See the CRA’s out-of-pocket expense guidance.

Have your bookkeeper confirm the treatment, including recoverable purchase tax. Do not add tax twice or assume every fee reimbursement is an agency disbursement.

Why is a price book better than guessing each quote?

A price book gives you a repeatable starting point. Each item should define the work, labour allowance, current material cost and pricing rule.

“Install a receptacle” is too vague by itself. Accessible framing and fishing through a finished room are different estimating conditions. Separate the common scopes and state the assumptions beside them.

MackOps has a price book with labour hours, material cost and markup, plus estimates built from templates. Its owner-only cost and margin view keeps those figures available to the owner. The contractor still supplies the inputs and decides the selling price; there is no AI setting prices.

The MackOps trades workflow connects estimating with projects, scheduling, employee hours, receipts and invoices with deposits. Comparing actual hours and purchases with the estimate tells you which price-book entries need attention.

If a four-hour allowance repeatedly takes six, investigate access, scope and productivity before simply raising every rate. Update the specific item and record why it changed. Keep a date beside material costs so an old supplier price does not become a permanent assumption.

Project photos also help explain scope. For contractors working with a content partner, the separate MackOps agency workflow covers content approvals and Instagram and Facebook publishing. Keep marketing decisions separate from confidential job-cost discussions.

What do contractors ask about electrical job pricing?

If two electricians work four hours, is that four labour hours?

It is eight labour hours: two people × four hours. Apply the appropriate rate for each person or a clearly defined crew rate. Do not multiply a crew rate by both people again.

Should I reduce the price when the customer supplies materials?

Remove material you are no longer supplying, but reassess the work. Confirm compatibility, missing components and responsibility for unsuitable products. Explain any inspection or handling allowance rather than quietly replacing the lost markup with another charge.

Is fixed pricing better than time and materials?

Fixed pricing works best when the scope and conditions are sufficiently clear. Time and materials can suit uncertain troubleshooting. Either approach needs understandable rates, exclusions and a process for agreeing to additional work.

Should my price book include HST?

A practical approach is to keep estimating costs and selling prices before tax, then calculate applicable tax on the quote or invoice. Make the customer-facing total clear. Confirm how your business should treat recoverable purchase tax.

How often should I review my charge-out rate?

Review it when wages, overhead or available billable hours change, and check it against actual results regularly. A quarterly review is a workable internal routine, not a legal requirement. Recalculate from records rather than increasing the rate by habit.

If this is the workflow you need, join the MackOps trades waitlist. Trades plans start at $100 USD per month.

About the author: Tomas Makacek is the Toronto-based founder of MackOps and Makacek Media. He runs a content agency serving trades and built MackOps from working with contractor clients.