Costs
How much does it cost to hire your first employee as an hvac contractor?
Short answer: a full-time HVAC helper paid $20 an hour costs about $41,600 a year in wages, plus about 7.65% in employer FICA, a small federal unemployment tax, your state’s unemployment tax, workers’ comp, and payroll costs. In the worked example below that adds up to about $47,210, or $22.70 per paid hour. Your state and your insurance quote move that number the most.
Key takeaways
- Federal employer taxes are the same in every state: 6.2% Social Security, 1.45% Medicare, and FUTA at a net 0.6% on the first $7,000 for most employers.
- State unemployment tax and workers’ comp depend on your state, your trade class, and your carrier. We use clearly labeled hypothetical rates below.
- Paid hours are not billable hours. Drive time, shop time, and training mean you recover the cost over fewer hours than you pay.
On this page
What goes into the cost of a first HVAC hire
When a one-person HVAC contractor business adds a W-2 employee, the bill has five layers. The first is the wage itself. The second is the employer share of FICA: 6.2% Social Security on wages up to the 2026 wage base of $184,500, and 1.45% Medicare on all wages, as listed in IRS Publication 15 and IRS Topic 751. The third is federal unemployment tax, which is 6.0% on the first $7,000 of each employee’s wages, usually reduced to a net 0.6% by the credit for paying state unemployment tax on time (IRS Topic 759 (Form 940/FUTA)).
The fourth layer is state: unemployment insurance (SUTA), which every state charges on its own wage base at a rate it assigns to new employers, and workers’ compensation, which most states require once you have an employee. The fifth is the cost of running payroll and the extras you choose to offer, like paid time off, a truck, tools, uniforms, or health coverage.
A worked example: $20 an hour, 40 hours a week
This example is national, not tied to one state. The federal lines are real 2026 figures. The SUTA and workers’ comp lines use hypothetical rates chosen only to show the math. Replace them with your state’s new-employer rate notice and a real insurance quote.
| Line (one year, 2,080 hours) | Amount |
|---|---|
| Wages at $20.00/hour | $41,600.00 |
| Employer Social Security, 6.2% | $2,579.20 |
| Employer Medicare, 1.45% | $603.20 |
| FUTA, net 0.6% on first $7,000 | $42.00 |
| State unemployment (hypothetical 2.7% on a $10,000 base) | $270.00 |
| Workers’ comp (hypothetical $3.50 per $100 of payroll) | $1,456.00 |
| Payroll software (Gusto Simple public price, 1 person) | $660.00 |
| Estimated annual cost | $47,210.40 |
| Per paid hour | $22.70 |
Two things are left out on purpose: overtime and benefits. Under the federal Fair Labor Standards Act, hours over 40 in a workweek are generally paid at one and a half times the regular rate (DOL overtime page), so a 45-hour week adds real cost. Health insurance, retirement matches, and paid holidays also sit on top. The true-cost calculator lets you add them.
Workers’ comp is the swing factor for HVAC contractors
Workers’ comp is priced per $100 of payroll by class code, and the rate for the same class can be very different from one state to the next. HVAC work can fall under different class codes depending on whether it is installation, service, or sheet-metal work, and states that run their own rating systems may use different codes entirely. We did not invent a national average. Ask an agent or your state fund for a quote under the right class before you set a wage, and use the DOL list of state workers’ compensation offices to find the agency in your state. A few states treat coverage differently; Texas, for example, lets most private employers opt out as “non-subscribers” if they file the required notice (Texas DWC non-subscriber page).
What HVAC contractors actually pay helpers
For context, the BLS OEWS May 2025 national table lists a median of $29.33 an hour for heating, air conditioning, and refrigeration mechanics and installers (May 2025). BLS does not publish a separate HVAC-helper line; its general “helpers, construction trades” group has a mean of $21.46 an hour. These are national figures that exclude the self-employed. Local pay can be well above or below them, and your state minimum wage may be higher than the federal $7.25 (DOL state minimum wage table). See our guide on how much to pay a helper for more.
Turn the cost into a price
A helper is paid for every scheduled hour, but you only bill for some of them. If your helper is billable 1,600 of 2,080 paid hours, which is an assumption you should replace with your own records, the $47,210 example works out to about $29.51 per billable hour before overhead and profit. Our can I afford a helper guide walks through that math.
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Run your own numbers Pick your state, wage, and trade in the free calculator.
Open the calculatorFrequently asked questions
How much does a $20-an-hour HVAC contractor helper really cost?
Wages for 40 hours a week are $41,600 a year. Employer FICA adds $3,182.40 and net FUTA adds $42. State unemployment tax and workers' comp depend on your state and class code. With hypothetical rates of 2.7% SUTA on a $10,000 base and $3.50 per $100 for workers' comp, plus $660 of payroll software, the total is about $47,210, or $22.70 per paid hour.
Do I have to carry workers' comp for one employee?
In most states, yes, but the rules are set by each state and some have exemptions or, like Texas, let private employers opt out with a filed notice. Check with your state workers' compensation agency before the first day of work.
Can I pay my first helper as a 1099 contractor instead?
Only if the person is actually independent under IRS and state tests. A helper who works your hours, on your jobs, with your tools is usually an employee. See the IRS guidance on independent contractors versus employees.
Federal figures were checked against 2026 IRS Publication 15 and the linked official pages in November 2026. Rows marked hypothetical are examples only. State rules and rates vary; confirm with your state agencies, an insurance agent, and your accountant before you hire.