How to Price Contractor Services in Ontario — 2026 Pricing Guide

Most Ontario contractors underprice their work. They charge what they think the market will bear, instead of what the work is actually worth. The result? Long hours, thin margins, and no money for marketing or growth.

This guide shows you how to price profitably — so you can invest in marketing, hire help, and actually build a business instead of just a job.

The Pricing Formula Most Contractors Get Wrong

The wrong way: "Materials + Labour = Price"

The right way: "Materials + Labour + Overhead + Profit = Price"

If you're not accounting for overhead and profit, you're working for free.

Understanding Your True Costs

Cost Category	Includes	Typical %
Materials	Supplies, equipment, consumables	25-40%
Direct Labour	Wages, WSIB, CPP, EI, benefits	25-35%
Overhead	Vehicle, insurance, tools, office, marketing, training	15-25%
Profit	Your actual earnings above costs	10-20%

Markup vs Margin (They're Not the Same)

This confuses many contractors:

• Markup: Percentage added to COST. $100 cost + 50% markup = $150 price
• Margin: Percentage of SELLING PRICE that is profit. $150 price - $100 cost = $50 profit = 33% margin

A 50% markup = 33% margin. A 100% markup = 50% margin. Most contractors need at minimum a 50% markup (33% gross margin) to be profitable after overhead.

Pricing by Trade in Ontario (2026)

Trade	Hourly Rate	Typical Markup	Notes
Electrician	$85-150/hr	60-100%	Higher for emergency work
Plumber	$90-160/hr	60-100%	Emergency premium 1.5-2x
HVAC	$85-140/hr	50-80%	Equipment margin is key
Roofing	$75-120/hr	40-70%	Material costs higher
Painting	$50-90/hr	50-80%	Low material cost = higher margin
General	$65-110/hr	40-60%	Manage subs efficiently
Landscaping	$55-95/hr	40-70%	Seasonal pricing premium

The "Race to the Bottom" Trap

If you're competing on price, you've already lost. The cheapest contractor gets:

• The worst clients (most demanding, most complaints)
• The thinnest margins (no room for mistakes)
• No money for marketing or growth
• Burnout

Instead, compete on value, trust, and convenience. A strong Google review profile lets you charge 10-20% more than competitors.

How Marketing Pays for Higher Prices

This is the key insight: investing in marketing allows you to charge more.

• Direct mail creates exclusive leads — no price competition
• Strong reviews build premium perception
• Professional branding signals quality
• The contractor who markets consistently gets first call advantage

Our lead generation campaigns put you in front of homeowners before your competitors — giving you the pricing power of being first.

FAQ

What markup should a contractor use?

Minimum 50% markup on direct costs. Higher-skill trades should target 60-100% markup.

How do I raise my prices without losing customers?

Build value first: reviews, branding, response time. Then raise 5-10% at a time. Price-sensitive losses were never profitable.

Should I charge hourly or flat rate?

Flat rate is almost always more profitable. Customers prefer knowing total cost. Use hourly only for uncertain repair scope.