HVAC Commission Pay Models That Drive Performance: Everything You Need to Know

If you're an HVAC business owner, there are many ways you can pay your techs:

• Hourly: Show up, get paid, regardless of results
• Flat rates: Do the job, collect the check (often used with sub-contractors)
• Straight salary: Same monthly takehome regardless of hours or performance

Then there's commission-based pay.

Commission-based pay (or performance pay) means techs get paid based on what they actually bring to your business. More sales = more money. Better results = bigger paychecks.

And that changes everything.

Suddenly your employees start to think like business owners. They're looking for ways to help customers, sell maintenance agreements, and grow your revenue, because their income scales the better they perform. 

Whether you're an HVAC owner wondering if commission pay could transform your business, or a tech curious about making more money, this guide breaks down exactly how it works.

What Is HVAC Commission Pay?

Commission pay is structure where technicians or salespeople earn a percentage of the revenue they generate. So instead of just getting a salary paid for their time, they can earn more based on work they do or the sales they make. 

The purpose of commission pay is straightforward, it links earnings with performance. So your best-performing techs can earn way beyond their hourly pay or annual salary. 

Here’s the difference between hourly, salaried and commission based pay:

• Hourly workers get paid the same rate regardless of what they accomplish during their shift. 
• Salaried employees receive consistent paychecks regardless of how busy they are. 
• Commission workers, however, can see big swings in their income based on their performance.

Typical Rates And Structures For HVAC Commission

So what does HVAC commission actually look like?

Most HVAC companies with commission structures pay between 4-8% commission on the total sale or service value. The exact percentage depends on the employee's role, experience level, and what they're selling.

Commission pay is most success when it’s implemented as part of an overall business strategy:

• Want more system sales? Offer higher commission on equipment and systems to your techs. 
• Need more maintenance agreements? Offer techs a bonus or commission on every maintraince agreement they upsell. 

Here are the 3 most common ways HVAC companies structure commission:

1. Flat-Rate Commission

This is the simplest approach to commission: Everyone gets the same percentage on everything they sell, period. And the rate doesn't change regardless of how much they sell in a month.

So if a tech sells a $10,000 HVAC system at 6% commission, that means $600 in their pocket.

This works great if:

• You're just starting with commission pay (keep it simple)
• Your pricing is consistent across the board
• Your team likes predictable, easy-to-calculate payouts

Flat-rate commission is the simplest approach, it means your techs earn the same percentage on everything they sell. And the rate doesn't change regardless of how much they sell in a month.

For example: If a tech sells a $10,000 HVAC system at a 6% commission rate, they earn $600 on that sale.

This model works well for:

• New businesses just starting with commission pay
• Companies with consistent pricing and straightforward services
• Teams that prefer simple, predictable commission calculations

The downside? It doesn't provide extra motivation to sell more since the rate stays the same regardless of performance.

The problem? There's no extra motivation to sell more. Whether your tech sells $50K or $200K that month, they're getting the same percentage.

Flat-rate is easy to understand, but it doesn't necessarily drive the behaviors that grow your business.

2. Tiered Commission

Tiered commission increases the percentage as sales volume grows. So the more your techs sell, the higher percentage they earn.

Here's how it might work in an HVAC company:

• First $10K in sales: 3% commission
• Next $10K ($10,001-$20,000): 5% commission
• Everything above $20K: 7% commission

This structure creates a powerful incentive to sell more because each additional dollar earns a higher percentage once you cross into the next tier.

Suddenly on each service call, they're thinking: "What if I suggest that air purifier? What about a maintenance agreement? Can I upsell this repair to a full system replacement?"

With performance pay and commissions, tour tech knows every additional dollar they sell earns them MORE money, so their incentives are aligned with yours. 

3. Mixed Base Plus Commission

This is the most popular way to implement commissions and performance pay as it offers the best of both worlds. Your techs get a guaranteed paycheck every month, PLUS they earn extra money for results.

So let’s say your techs get paid $25 per hour. Then get a $50 bonus on every service plan sold and $25 for every 5-star review, a tech working 40-hours per week, upselling three maintains plans and getting 10 5-star reviews could earn: 

• $1,000 base pay
• $150 for plan upsells
• $250 for 5-star reviews

Mixed base + comission pay combines a guaranteed base salary or hourly rate with performance-based commission, it provides income stability while still rewarding results.

Choosing Between Hourly Pay and Commission 

The pay model you choose directly impacts the performance of your team, customer experience, and your bottom line.

Some HVAC owners like to keep it simple with hourly pay. But, after seeing how performance pay has helped over 200 service business, I know they're missing out on huge growth oportunity.

Here's a quick comparison of how different pay models impact your business:

Benefits Of Hourly Pay

Hourly pay remains popular in HVAC for good reasons:

• Technicians know exactly what they'll earn each week
• Companies can budget labor costs with precision
• No pressure on techs to sell unnecessary services
• Simpler payroll processing and compliance

This model works well for maintenance-focused businesses or companies that handle mostly warranty work where upselling isn't a primary concern.

Hybrid Approaches (The Sweet Spot)

Here's what I've seen work best in the real world:

Most successful HVAC companies aren't doing pure commission or straight hourly. They're doing hybrid hourly rates + performance-based commissions. 

Here's why this crushes the other models:

• Your techs have income stability (they can pay their mortgage)
• But they also have serious upside (they can make real money)
• You get consistent customer service (they're not desperate for every sale)
• Plus motivated sales behavior (extra money is still extra money)

Real example: Tech makes $25/hour for all their scheduled time, PLUS 5% commission on any additional services they sell.

So on a typical service call:

• Show up and fix the AC = $25/hour (guaranteed)
• Sell a $500 air purifier = Extra $25 commission
• Sign them up for $1,200 maintenance agreement = Extra $60 commission

That single service call just went from $25/hour for your tech to $110 for 1 hour of work. That's makes a huge difference to not just the motivation of your techs but the satisfaction if your customers as they're no longer recieving a servce from a tech who gets $25/hour no matter what, to someone who is incentivized to offer the best possible service.

Common Commission Pitfalls (And How To Overcome Them)

1. Tracking And Reporting Errors

If you have a multiple techs taking 3-5 services calls each day, there's a lot to keep on top of. So tracking performance pay manually can often lead to mistakes, disputes, and frustrated employees.

When techs don't trust the tracking system, their motivation suffers.

2. Over-Aggressive Upselling

The biggest customer complaint about commission-based techs? Feeling pressured to buy services they don't need.

The solution here is training. You need to teach your techs when to push upsells and maintenance plans. It’s not about ramping up the services for every customer, you need to make sure that the upsell and customer needs are 100% aligned. 

To prevent unethical upselling:

• Create clear guidelines about appropriate recommendations
• Tie part of the commission to customer satisfaction scores
• Require documentation or photos justifying suggested repairs
• Monitor unusual selling patterns that might indicate pressure tactics

Remember that one pushy technician can damage your company's reputation for years.

3. Complicated KPIs

If your techs need a calculator and a PhD to figure out their commission, you've already lost.

Here's my rule: Your KPIs should be so simple that your tech can explain them to their spouse in 10 seconds.

"I get $20 for every 5-star review, $100 for every maintenance agreement I sell, and 3% on any equipment."

From working with over 200 service businesses to implement performance pay, here are the KPIs that I see actually move the needle:

• 5-star reviews (your reputation = more leads)
• Maintenance agreement sign-ups (recurring revenue = higher business value)
• Parts and equipment sales (higher average ticket)
• Zero callbacks (customer satisfaction + efficiency)

When KPIs are clear your tech walks into every job knowing exactly how to make more money. They're not confused about what matters. They're not guessing what you want them to focus on.

They see an opportunity for a maintenance agreement? They know that's $100 in their pocket.

Customer seems happy? They're asking for that review before they leave.

Clear KPIs turn every service call into a revenue opportunity because your techs know exactly what actions pay them more.

Launching HVAC Commission and Performance Pay 

Incentives changed my life. When I joined a startup and we made an agreement that I would receive rev share from new customers that I closed, it completely changed my motivations. 

Now, I want to help other people experience that kind of growth. That’s why I started ShareWillow. 

Managing commission and performance pay manually is a nightmare of spreadsheets, disputes, and wasted time. So ShareWillow helps HVAC businesses automate the entire process.

Here’s how it helps: 

1. Automated Calculations and Payouts

ShareWillow thresholds that determine if and when a payout happens. You’ll give your team a goal to chase, and only make payouts when you hit it.

2. Real-Time Dashboards

Today's techs want to know how they're performing without waiting for payday. 

Build trust with a dashboard that’s easy for your team to use. Each employee can see their profit share award and their historical payouts, plus sign and access agreements in the same place.

3. Put Goals Front and Center

Keep your team’s eye on the prize, each employee’s dashboard shows them their incentive plan, plus the goals they need to hit for a payout.

Help Your Employees to Think Like Owners With Transparent Incentives

The most successful HVAC businesses create commission structures that align tech incentives with company goals. When done right, everyone wins: techs earn more money, customers get better service, and the business grows profitably.

The key is transparency, when your techs clearly understand what what KPIs enable them to earn more, they focus their energy on those activities. This creates a positive cycle where individual success drives company success.

ShareWillow helps HVAC companies design and implement pay plans that drive performance. Our platform makes it easy to track, calculate, and communicate commission in real-time.

To explore how your business could benefit from a more effective commission structure, book a strategy call.