Plumbing Business Profit Margin: IRS Data, Costs & Break-Even
Quick answer: The IRS reports a 15.7% net margin for 2023 sole proprietors across specialty trade contracting (NAICS 238), which includes plumbing but does not isolate it. That Schedule C net income is before owner pay. A plumbing shop’s result depends on parts, paid labor, emergency coverage, travel, callbacks, and the mix of repairs and installations.
Gross margin, net margin, and the plumber-owner
A service ticket’s gross profit is its collected price minus direct parts and paid field labor. Gross margin divides that amount by the collected price. Net margin also absorbs dispatch, office time, vehicles, insurance, software, marketing, and other business expense. A cost markup and a selling-price margin produce different percentages; test a proposed quote in the markup versus margin calculator.
When the owner clears drains or installs fixtures personally, Schedule C does not deduct a wage for that work. Its net income therefore combines payment for owner labor with any economic profit. Before asking how much a plumbing business owner makes, separate a reasonable field and management wage from the remaining profit, and account for taxes and cash retained for equipment. The IRS data below is for the whole NAICS 238 sector, not a plumbing-company survey.
| Metric | Construction: Specialty trade contractors (NAICS 238) |
|---|---|
| Net margin | 15.7% VERIFIED DATA |
| Average receipts per return | $102,220 VERIFIED DATA |
| Average net income per return | $16,054 VERIFIED DATA |
| Materials & supplies | 12.1% VERIFIED DATA |
| Contract labor | 12.9% VERIFIED DATA |
| Cost of labor + salaries and wages | 11.0% VERIFIED DATA |
| Car and truck | 7.7% VERIFIED DATA |
| Supplies | 6.5% VERIFIED DATA |
| Depreciation | 4.3% VERIFIED DATA |
| Insurance | 1.8% VERIFIED DATA |
| Advertising | 0.6% VERIFIED DATA |
Schedule C net income is before any owner salary: sole proprietors do not deduct pay to themselves, so net margin here includes the owner's compensation for their own labor.
Sector-level figures: the table does not split electricians, plumbers, roofers etc.; NAICS 238 covers all specialty trades, NAICS 561 covers landscaping, pest control and building services together with unrelated admin services (staffing, security, travel).
What changes a plumbing shop’s margin?
Small repairs can carry a strong price per visit but lose time to travel, diagnosis, parts pickup, and return trips. Water-heater or repipe projects have larger material purchases and more exposure to scope changes. Record direct costs by job type instead of applying one average parts percentage to every call. A minimum service charge must recover the time between jobs; a project quote needs allowances for access, disposal, permits, and inspection where applicable.
The benchmark data gives a BLS plumber median wage of $30.67 per hour (official occupational wage). It is an employee wage, not the cost of employing a plumber or the customer’s hourly rate. The BLS ECEC construction total compensation measure is $51.96 per hour (official broad-industry figure); actual payroll burden varies by crew and coverage. Stocked vans, fuel, insurance, and repeat visits for a leak or failed installation reduce net profit even when a ticket looks profitable. Estimate those commitments alongside startup costs and the applicable license path.
Example monthly plumbing numbers
Example inputs, not a benchmark: Suppose monthly receipts are $50,000. Parts and permits cost $14,000, paid field labor costs $16,000, and fixed and other operating expenses total $12,000. Gross profit is $50,000 − $14,000 − $16,000 = $20,000, giving a 40% gross margin. Net profit is $20,000 − $12,000 = $8,000, or $8,000 ÷ $50,000 = 16% net margin. If the owner performed unpaid field work, part of that $8,000 compensates that labor. Replace every example input with your ledger totals below.
Profit Margin Calculator
| Profit | — CALCULATED |
|---|---|
| Margin Percent | — CALCULATED |
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Results use the entered costs, revenue, hours, and percentages shown above. Percentages are divided by 100 before calculation.
Jobs needed before the shop breaks even
Find the contribution per completed job: average collected ticket less parts, paid field labor, and job-variable travel or disposal. Divide monthly fixed cost by that contribution and round up to a whole job. The break-even calculator makes that calculation; jobs needed converts a chosen revenue goal to completed calls. Split emergency repairs from planned installations if their tickets and costs differ sharply. Review the plumbing hourly-rate guide before using a blended ticket in staffing decisions.
Jobs = fixed monthly cost / (average ticket × gross margin). The cited IRS figure is 15.7% for all NAICS 238 sole proprietors before owner pay, not a plumbing target. Judge the shop against its own labor-adjusted history and cash needs. It can be if repair and installation prices recover parts, paid labor, travel, callbacks, and overhead. Measure each service line from collected revenue. Sector-level Schedule C figures cannot answer that for plumbers. Owner income includes any draw or wages plus residual profit, subject to taxes and reinvestment. Only if the call premium covers standby time, dispatch, overtime, and any return visit. Compare net contribution per call, not the advertised emergency rate. Charge parts actually used to each job and track spoilage or lost stock separately; otherwise service margins look better than the shop's cash result.Break-Even Calculator
Jobs Per Month — CALCULATED Show formula
Frequently asked questions
What is a good profit margin for a plumbing business?
Is a plumbing business profitable?
How much does a plumbing business owner make?
Do emergency calls improve margin?
Should van inventory count as job cost?
See the plumbing business hub for the broader operating plan.
Official sources
Last updated: October 2, 2026