HVAC Pay: What Technicians Earn and How to Build Competitive Compensation Packages

If you own an HVAC business or manage its finances, you should know the total cost of employing skilled industry professionals beyond just base pay.

Because of the growing demand, annual salaries for HVAC technicians are rising across many states. This is why offering a competitive pay package is an essential part of running a competitive, sustainable business.  

In this guide, we break down how much technicians really earn and how to build compensation packages so you can attract and retain top talent. We also assess the outlook for the HVAC industry moving forward as heating and cooling technologies evolve.

What Is the Average HVAC Technician Salary?

The national average HVAC annual salary is approximately $58,000. This varies widely between technicians. Entry-level employees start closer to $40,000 while senior-level techs can make over $80,000.

Hourly rates vary from $20 to $35+ per hour, depending on skill and experience level. The average hourly rate is around $28.

Regional differences affect salaries substantially. In general terms, pay is higher in Alaska and many northern states. It tends to be lower in southern states and medium-range in the Midwest.

According to ZipRecruiter employment figures, the highest paying states include Washington ($66,577 annually, $32/hr), Massachusetts ($64,198 annually, $30.86/hr), and Alaska ($63,305 annually, $30.44/hr).

The lowest-paying states include Georgia ($49,635 annually, $23.86/hr), Arkansas ($48,607 annually, $23.37/hr), and West Virginia ($45,507 annually, $21.88/hr).

Key Factors That Impact HVAC Pay

Let's look at the variables that influence HVAC technicians' earnings.

• Experience and skill level: As with most professions, experience counts. Senior HVAC technicians with years of hands-on experience and industry certifications justify higher pay than newer techs still learning the ropes.
• Certifications and education: Industry-recognized certifications demonstrate a technician's competence and their commitment to the profession.
• HVAC techs with NATE certification, EPA 608 license, and advanced on-the-job training generally earn more than those with a high school diploma only.
• Specialization: Technicians with specialized expertise usually have higher HVAC pay. High-level expertise in the following areas tends to be well rewarded:
  • Refrigeration
  • Smart home setups
  • Geothermal systems
  • Large commercial and industrial equipment
• Company size and type: Larger companies handling complex projects or those operating in specialized sectors typically offer higher, more structured pay and benefits. Smaller businesses may offer flexibility, but sometimes struggle to match corporate-level pay scales.
• Union vs non-union: Union HVAC positions typically offer higher HVAC salary and benefits than non-union roles. Unionized technicians are more likely to receive structured raises, health benefits, and pension plans.
• On-call and overtime: In extreme temperatures, malfunctioning heating and air conditioning systems demand emergency callouts. Compensation packages should financially reward technicians who handle all-hours service calls or work plenty of overtime.  

Performance-Based Compensation Structures

Successful HVAC businesses use more than base pay to attract and retain skilled professionals. Performance-based compensation packages motivate employees, elevate service quality, and drive profits.

Here are the key elements of effective performance-based structures:

• Commission on upsells: Incentivize your team to earn bonuses for selling maintenance plans or system upgrades. This encourages techs to spot opportunities that'll grow your business while enhancing customer value.
• Incentives for customer satisfaction: Bonuses tied to positive feedback are very effective. Some service quality measures you can use for bonuses include:  
  • Good reviews
  • Job completion speed
  • Customer Satisfaction Scores (CSAT)  
  • Net Promoter Scores (NPS)
• Pay-for-performance plans: Salary increases or bonuses can be linked to key performance indicators (KPIs) such as:
  • Job completion rates
  • First-time fix rate
  • Average ticket size
  Managing these metrics ensures techs are rewarded for their efficiency, accuracy, and sales skills and initiatives.
• Project-based bonuses: For complex projects, consider offering bonuses upon successful completion. The bonus milestones could be meeting/ exceeding timelines and budget, or achieving specific quality standards.
  

How Profit Sharing Enhances HVAC Technician Compensation

Profit-sharing is a proven method of attracting and retaining high-performing HVAC technicians.

A profit share allows your team to benefit directly from the company's overall financial success. It often boosts technician compensation by a third or more, with the best performers earning six figures.

Consider the good things that come from sharing the pie:

• Employees feel a direct stake in the profitability of the business.
• A stronger sense of ownership inspires motivation.
• Employees are more committed to service excellence and customer satisfaction.

Without incentives, technicians just follow the schedule. "I gotta go to this house, then that one... whatever, I'm making my $26/hour regardless."

But with performance pay, everything changes:

• Arrive on time? Extra money.
• Complete the job efficiently? Extra money.
• Attach a maintenance plan? Extra money.
• Get a 5-star review with a photo? Extra money.

Suddenly, your $26/hour technician is making $34/hour effective rate – a massive jump – while driving the behaviors that grow your business.

They're texting review links to happy customers, suggesting maintenance plans, and looking for ways to provide better service... not because you're hovering over them, but because their incentives are aligned with your business goals.

How to implement profit sharing in your HVAC business

Here's a quick guide to creating an effective profit-sharing scheme:

1. Define a profit pool: Set aside 10–15% of net profits for distribution to employees.
2. Clear communications: Communicate how the profit-sharing pool is calculated and distributed to build trust and ensure clarity.
3. Allocate shares to employees: Distribute shares based on factors like tenure, job role, and performance metrics.
4. Distribute earnings: Offer payouts quarterly or annually and ensure transparency in how funds are calculated.
5. Automate tracking & reporting: Use a specialized platform like ShareWillow to streamline the profit share process. Advanced tracking and reporting ensure accurate calculation, payouts, and transparency for everyone.

The ideal plan is a win-win situation, rewarding both the business and its team.  

But profit-sharing doesn't always involve giving equity. You could also offer a profit share bonus, a one-time payment awarded when the company meets agreed-upon financial goals during a certain period.

Building a Competitive Compensation Package

The best packages match the company's financial goals with the employees. A well-structured compensation plan typically incorporates:

• Competitive base salary: Create a solid foundation with a good base salary. Aim for a good hourly rate or annual salary based on experience, certifications, and local market wages.
• Performance bonuses: Incentivize performance with job completion bonuses, commissions on upsells, or quarterly KPIs tied to quality and efficiency.
• Health and retirement benefits: Explore offering the following based on how employees value the benefit:
  • Medical/ dental insurance
  • 401(k) matching
  • Pension contributions
• Paid time off (PTO): Decent vacation, sick leave, and holiday pay help maintain work-life balance and reduce burnout.  
• Training and development: Subsidizing certification costs and training fees is appreciated by technicians who want to grow with your company.
• Profit-sharing opportunities: A profit-sharing program is often the best way to encourage employees to act like passionate owners. It can be the key differentiator that gives your company a competitive edge.

Note: Clearly explain the value of the package to all team members. A new service technician focusing mainly on base salary may not fully appreciate the larger benefits. Research shows that employees are 50% more likely to leave if they believe they are paid below-market (even if they aren't), so clarity is vital.

‍

‍

‍

Salary Trends and Future Outlook for HVAC Careers

Seasoned HVAC pros and new job seekers alike are naturally interested in what the future holds for the heating and cooling systems industry. The good news is that the job outlook and general prognosis are positive.

Job growth projections: The Bureau of Labor Statistics indicates that skilled technicians will continue to see rising demand and pay for the next several years, projecting a job growth of 9% by 2033. This is much faster than the average for all occupations.

Rising wages: The demand for energy-efficient systems, building modernization, and labor shortages are pushing up salaries and HVAC job openings.

The importance of retention: As sustainability drives demand for advanced HVAC systems, keeping skilled technicians is critical. Competitive, innovative compensation and strong benefits will be key to retaining top talent in a tightening labor market.

FAQs

What job benefits matter most to HVAC technicians?

The benefits HVAC technicians value highly include:

• Health insurance
• Retirement plans (401k)
• Paid time off (PTO)
• Tool or vehicle allowances
• Paid training and certification support

How often should HVAC companies review their compensation packages?

Ideally, you should review compensation packages annually, or whenever market conditions change (e.g., labor shortages or inflation). Don't neglect to benchmark against the average salary for an HVAC tech in your area and pay attention to changing HVAC salary trends. Offering the best compensation packages in your area can help ensure your business can recruit and retain the best staff.

How can HVAC technicians make the most money?

Technicians specializing in high-demand areas like commercial HVAC, refrigeration, and energy-efficient systems often command higher pay. Expertise in smart HVAC systems and green technologies is also sought after and attracts good earnings.

Packaging It Up

As HVAC technician salaries keep rising and the labor market becomes more competitive, focusing only on base pay and bonuses overlooks the bigger picture.

Forward-thinking organizations are embracing comprehensive compensation strategies, including benefits, performance bonuses, profit-sharing, and other employee incentives. These innovative, flexible packages can boost loyalty and help your company stand out for excellence in a competitive market.

Book a demo with ShareWillow to learn more about how our profit-sharing tools incentivize employees to act like owners, creating a winning outcome for everyone.