Why do plumbers charge the rates they do?
How much should you expect to pay to expect to pay? And why it is so hard to find a good reliable plumber.
The example I'm using is based on London, UK and assuming the plumber is a genuine qualified plumber and heating engineer (i.e. qualified to do gas and boilers). What the end user can expect to pay is £60 to £70 an hour for an independent around £80 for a company. Some companies do charge up to and over £100. One well known national company will try to sell you a maintenance contract regardless.
Here's the reasons why;
I'm going to compare employed plumbers with free lance and small business plumbers to explain and see how much they should or might be charging.
OK lets start with a plumber who has completed their apprenticeship and can expect to earn £35,000 to £40,000 in paid full time employment, this would include plumbers aged 21 -22 recently qualified. So lets take the £35,000 we're looking at plumbers at least 25 with full drivers licence.
Here's the maths;
£35,000 made into a day rate, taking away paid holidays and week ends to arrive at 233 days ( [(356/7) x5] - 28 = 232.7 )
£35,000 OVER 233 days is £150 a day, or divide by 8 so £18.75 an hour. Most home owners would be extremely happy to pay these rates but here come the economics:
So we're starting on £150 for the "most employed" plumbers, companies naturally add vehicle, training, sickness loss, tools, consumables, advertising, admin and office costs. Also a gas plumber has to re take gas and hot water courses every five years. For a company that's 2 weeks paying their employee to train and exams which themselves typically cost around £2000.
(It's a slightly different topic, and I don't know what it costs medium and large companies to employ a plumber but I bet someone does).
A self employed or free lance sub-contracting plumber working for plumbing companies and builders, who often works for the same contractor many years. Will provide his own tools, van, insurance, and pay for his own retraining, and of course will receive no paid holidays day rates of around £200 are normal and more can be made if work is done on a price biases, which is very common and practice in large and small companies alike.
Small business plumber
Now lets take a look at the plumber working for home owners. If he or she wants to earn just the same as their employed counterparts they'll need to add these costs;
Same as a sub contractor; van, insurance, tools, training, registration.
First and foremost loss of earnings; time spent pricing jobs, meeting clients, communications and admin, supplying and sourcing materials. Cancellations and delays on jobs. I'm going to estimate this time at around 20% for easy maths though it probably it may in many cases be much more. (I for one have much less time spent travelling to view jobs and meeting clients due to my very small area of coverage see; About Us)
Plus consumables; petrol, gas flux and solder for soldering solvent weld, PTFE (plumbers tape), jointing compounds, wire wool and cleaning strips, saws and saw blades, drill bits etc etc...
Business costs advertising and website, accountancy fees, public liability, memberships of any trade body's.
So first lets take him or her to match there freelance counterpart as they also suffer those costs and land on the £200.
Then lets add 20% to account for time spent not directly.
Lets add £20? for consumables £260 (petrol is probably top but again personally mine is low £10 to £20 a week other tell me about £100)
Then the business costs, not including advertising, annually nearly £2000, so lets round up to that, (2000/233 = 8.5) call it £10, then as there will probably some advertising even if it's just on gum tree.
So they have to charge £270 a day to earn just the same their employed counterparts, and deal with all the hassle of running a small business.
Plus finally lets just remember that this is all assuming they get all the work they need and they must manage to find and organise it efficiently to get to this rate.
I think hourly rates really need another topic as travelling, logistics, time management etc etc all play a role. Very inaccurately lets say 50% time actually on jobs, £270/8 x50% = £67.5 as I write this I'm presently surprised with that figure as it's about normal in London, slightly less than the bigger companies charge but about right for one man bands.
£270 a day or £67.5 an hour are numbers many home owners would find expensive, and therefore there is a huge market for unqualified and inexperience operatives under cutting these rates. Some plumbers under charge unaware of the maths, many over charge too.
If your main interest as a plumber is to earn as much money as you can as a one man band, the best option is to be a sub-contractor or free lance plumber working for other business, consequently this is why it is so hard for home owners to find good reliable plumbers. Many plumbers try out running a small business and go back to sub contracting.
I'm also convinced, (admittedly only through empirical evidence), that many plumbers and tradesmen are self employed because they cannot hold down a job or are unemployable.
The last point is the perks of being self employed are mainly not financial, plus a tradesman creates a job safe for life no risk of redundancy. Choose your clients, I do this geographically and my average commute is 1 to 15 minutes. Periods out of work can be really small compared to employed or free lance plumbers and we have not taken that into account. Each business is an opportunity.
Jeff. Just seen your article and I found it very helpful. I am just going back to self employed plumbing and gas again. 20 year career with working for someone else in between. Having read your article I hopefully wont make the same mistakes as last time. Good work, Nick.
I liked your article on why plumbers charge what they do.
I did a similar thing here in Brighton and came to the same sort of figures as you.
It is hard to explain to customers our rates. In the end I took the wisdom of another plumber who said he just had to get hard. Not me but it can feel like a jungle out there.
NW1 Camden, Primrose Hill
NW2 Willesden Green Cricklewood, Childs Hill
NW3 Hampstead, Belsize
NW5 Kentish Town, Camden
NW6 West Hampstead, Kilburn, Queens Park
NW7 Mill HIll
NW8 St Johns Wood
NW10 Kensal Rise, Harlesden, Willesden
NW11 Golders Green Hampstead Garden Suburb
W9 Maida Vale
W10 North Kensington, Queens Park