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Plumbing profit margins

What one-owner plumbing businesses report to the IRS, where the money goes on a plumbing job, and a calculator to check your own margin.

68.8%Gross margin, IRS sector
15.7%Net margin incl. owner pay
$102,220Average receipts per return
What do you want to work out?
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Leave at 15% if you do not know it yet. The business mode works it out.
Gross margin
35.7%
$1,250 over job costs
55.6%Markup
$725Net profit
20.7%Net margin
Free. Your numbers become an estimate you can send from your phone.

How we got this

  1. Job cost$1,200 materials + $900 labor + $150 other = $2,250
  2. Gross profit$3,500 − $2,250 = $1,250
  3. Gross margin$1,250 ÷ $3,500 price = 35.7%
  4. Markup$1,250 ÷ $2,250 cost = 55.6%
  5. Overhead share15% of $3,500 = $525
  6. Net profit$1,250 − $525 = $725 (20.7%)
MarkupGives a margin of
25%20%
33%24.8%
43%30.1%
50%33.3%
67%40.1%
100%50%

Plumbing profit margin benchmarks

The IRS reports what one-owner businesses filing Schedule C earn, by sector. Plumbing falls under Specialty trade contractors. For tax year 2023, 2,521,516 returns reported $257.8 billion in receipts, $80.4 billion in cost of sales and $40.5 billion in net income less deficit (the table gives thousands of dollars):

BenchmarkValue
Gross margin68.8%
Net margin, owner pay included15.7%
Average receipts per return$102,220
Average net income per return$16,054

The owner's own draw is not an expense on a Schedule C, so that net margin is mostly the owner's wage, not profit on top of it.

Where the money goes in plumbing

Plumbing service is labor and drive time first, then parts. A water heater swap carries the tank, fittings and haul away; a drain call is almost all labor.

For a worked example, our plumbing cost estimator puts water heater, tank (40 to 50 gal) at $825 to $1,755 a job, typical $1,290, and treats about 23% of that as labor. On the typical price, that is about $297 of labor and $993 of materials, equipment and everything else, before your overhead and profit.

Where plumbing margin leaks, and how to win it back

  • No trip or diagnostic charge, so quotes that do not close lose money
  • Parts sold at cost instead of marked up
  • Second trips to the supply house
  • Flat prices never updated after parts costs rise
  • Unbilled time waiting on access

Ways plumbers raise margin: charge a trip fee that is credited to the repair; move common jobs to flat prices from a price book; stock the van so most calls finish on the first visit; sell a yearly inspection and water heater flush plan.

Check your plumbing prices against the costs

The typical national prices from our sourced calculators are a check on whether your prices leave room for margin:

ServiceTypicalRange
Water heater, tank (40 to 50 gal)$1,290$825 to $1,755 a job
Water heater, tankless$2,439$1,267 to $3,611 a job
Heat pump water heater, installed$2,350$1,200 to $3,500 a job
Expansion tank, added$220$90 to $350 a job
Toilet, replace$464$262 to $666 a job
Faucet, replace$319$156 to $482 a job

Work out the margin on each line of your menu, not just the big jobs. The usual plumbing menu: water heater, tank (40 to 50 gal); water heater, tankless; heat pump water heater, installed; expansion tank, added; toilet, replace; faucet, replace; drain clog, clear; pipe leak, repair; garbage disposal replacement; shower valve or cartridge repair; repipe, per fixture; sewer line, dig and replace; sewer line, trenchless; sewer camera inspection.

Overhead comes out of the margin before profit. In plumbing it includes general liability insurance, which Insureon's customers who are plumbers pay an average of $147 a month for; commercial auto at $285 a month on the same figures.

Work out your own margin

Put one recent plumbing job into the calculator above, or switch it to "My margin for the year" to set your year next to the IRS benchmark. A 50% markup is a 33% margin; the markup calculator shows the rest.

Sources

Last checked October 9, 2026. This page is general information, not legal or tax advice. Rules change and differ by state and city, so confirm with the agency named before you act.

FAQ

What is a good profit margin for a plumbing business?

As a benchmark, one-owner businesses in specialty trade contractors reported a 68.8% gross margin and a 15.7% net margin to the IRS for 2023, with the owner's pay inside that net figure.

How can plumbers raise their margin?

Charge a trip fee that is credited to the repair, move common jobs to flat prices from a price book and stock the van so most calls finish on the first visit.

What are the biggest costs in plumbing?

Plumbing service is labor and drive time first, then parts. A water heater swap carries the tank, fittings and haul away; a drain call is almost all labor.

Where do plumbers lose margin?

No trip or diagnostic charge, so quotes that do not close lose money, parts sold at cost instead of marked up and second trips to the supply house.

More for plumbers

Tools listPlumbing tools listWhat plumbers buy first, then the pro kit and van stock.Services and pricesPlumbing services listThe plumbing service menu with typical prices.InsurancePlumbing insuranceWhat plumbers pay for each policy, and state rules.SuppliersPlumbing suppliersWhere plumbers buy, and the pro programs.Maintenance plansPlumbing maintenance plansPlan tiers and a sales script for plumbers.Koira for plumbingHow plumbers run on KoiraThe office side of a plumbing business, done for you.

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Plumbing Profit Margins: Benchmarks and a Calculator | Koira