Contractors and trades
Accounting for plumbers in Ontario: what a call-out really earns
Last reviewed: August 2026
Accounting for plumbers in Ontario: why after-hours premiums flatter a job margin report, how to split parts from labour revenue, and what callbacks cost.
Emergency work carries the highest prices on a plumbing rate card and usually the worst gross margin percentage on the job report. The premium goes on the invoice in one line while the cost of the premium spreads itself across overtime wages, unbilled travel and a return visit three weeks later that nobody links back to the original call. Until those are pulled onto the same job, an after-hours call looks like the best work you do.
An 11pm call, priced out properly
Say the after-hours rate card is a $180 call-out plus $165 an hour, and the job takes an hour and a half with $95 of parts off the van.
| Line | Amount |
|---|---|
| Call-out charge | $180.00 |
| 1.5 hours at $165 | $247.50 |
| Parts billed | $95.00 |
| Invoice before tax | $522.50 |
| HST at 13% | $67.93 |
| Invoice total | $590.43 |
Now the cost side, and this is the part the P&L does not show you by job. The technician is on $38 an hour, paid at time and a half after hours, so $57. The clock runs 0.6 hours out, 1.5 hours on site and 0.5 hours back, which is 2.6 paid hours and $148.20 of wages. Employer CPP, EI, WSIB, vacation and statutory pay at roughly 22 per cent takes that to $180.80. Parts cost $58. Fifty-five kilometres of van at 35 cents runs $19.25.
Total job cost is $258.05, so the margin is $264.45, or 50.6 per cent.
Run the same repair at two in the afternoon on a $120 call-out and a $135 hourly rate. The invoice drops to $417.50. Wages are 2.3 paid hours at $38, so $87.40, loaded to $106.63. Parts stay at $58 and the shorter drive costs $10.50. Cost is $175.13, margin is $242.37, and the percentage is 58.1 per cent.
The night call earns $22 more in dollars and eight and a half points less in percentage. Then add the callback rate, because work done fast in a flooded basement at midnight comes back more often. If one call in eight needs a return visit that burns $190 of time and gets billed to nobody, that is $23.75 of expected cost on every after-hours call. Margin falls to $240.70 and 46.1 per cent, and the night work is now behind the afternoon work on both measures.
None of that means stop taking the calls. It means the after-hours rate has to be set from the loaded cost of an after-hours hour rather than as a round-number premium on the day rate, and it means after-hours needs its own job type in the books so the number is visible every month instead of once a year. Getting the job types right at the setup stage is most of what our work with contractors involves in the first few months.
Parts and labour are two businesses, so give them two revenue lines
A plumbing invoice mixes a resold physical product with sold time. They have different cost behaviour, different pricing logic and different constraints, and a single sales account buries both.
Take a month at $92,000 of revenue. Split it and code the costs to match:
| Revenue | Cost | Margin | Margin % | |
|---|---|---|---|---|
| Parts and materials | $31,000 | $17,200 | $13,800 | 44.5% |
| Labour | $61,000 | $43,000 | $18,000 | 29.5% |
| Combined | $92,000 | $60,200 | $31,800 | 34.6% |
The combined line looks survivable. The labour line is the problem, and labour is the resource you cannot buy more of at short notice. Reported together, the healthy parts margin subsidises an underpriced hour, and the owner keeps hiring to sell more of the thing that earns 29.5 per cent.
Two things go wrong with parts pricing specifically. The first is arithmetic. Multiplying a $58 cartridge by 1.4 does not give a 40 per cent margin, it gives $81.20 and a margin of 28.6 per cent. For a 40 per cent margin you divide by 0.6, which is $96.67. Shops that mean margin and type markup lose the difference on every part they sell. The second is that the price has to carry more than the supply house invoice, because parts absorb pickup time, delivery charges, restocking fees on returns and the cash tied up in van stock that has not been billed yet.
HST follows the price you charge rather than the price you paid. You claim an input tax credit of $7.54 on the $58 purchase and charge $12.57 on the $96.67 sale, and the difference is remitted like any other margin.
Callbacks are a real cost with no revenue attached
A callback is labour you already paid for, sold once, and delivered twice. It shows up as a drop in utilisation and never as a line anyone reviews.
Measure it as callback hours divided by billed labour hours, monthly, by technician and by work type. Once that ratio exists you can do two useful things with it. You can see whether a particular technician needs support rather than a warning, and you can put a provision in the accounts for warranty work on jobs already invoiced, so a heavy callback month lands in the period the work was sold rather than the period it came back.
For a shop billing 900 labour hours a month at a loaded cost near $46, a callback rate of four per cent is 36 hours and about $1,656 of cost. Cut it to two per cent and you have found $828 a month without selling anything.
Permits, backflow and the testing that repeats
Plumbing permits come from the local building department under the Building Code, and every municipality sets its own fee schedule, so there is no provincial number to quote. Backflow prevention sits in Part 7 of the Building Code, which requires backflow preventers where backflow or back siphonage may occur and points at the CSA B64 series for device selection and installation. Ontario's guide for drinking water system owners notes that section 35 of the Building Code Act means the Act and the Code supersede municipal by-laws respecting construction, which is why municipal cross connection control programs mostly attach to existing buildings rather than new work.
The recurring money is in the testing side. Municipalities running a program typically register or license the testers themselves, testers need current liability insurance to qualify, and test equipment needs its annual calibration verified under the CSA B64.10.1 standard. Those are annual, predictable and easy to forget when the renewal notice lands in a month you are already busy.
Unlike electrical work, there is no provincial plumbing contractor licence in Ontario equivalent to the ESA contractor licence. Regulation runs through individual certification plus municipal permits and inspections. Some municipalities impose their own business licensing on top, so confirm yours locally rather than assuming.
Plumber 306A is one of Ontario's 23 compulsory trades. A person cannot lawfully work in the trade without a Certificate of Qualification, a Provisional Certificate of Qualification or a Registered Training Agreement, and Skilled Trades Ontario charges journeypersons in compulsory trades an annual $60 plus HST to keep the certificate current. Budget it per certified person rather than per company.
When you start working for builders
A service shop that takes on renovation or new construction work inherits a set of obligations it never had before. Money gets held back on contracts, and the timing of the HST on a holdback follows its own subsection of the Excise Tax Act rather than your invoice date, which we set out in construction holdbacks, HST and WIP. Paying other trades brings reporting with it once construction is more than half your income, covered in T5018 filing for Ontario contractors. Whether the person holding your invoice is a subcontractor at all is a question with payroll consequences, and the subcontractor or employee check is the fastest way through it. Premiums and clearance certificates run through WSIB for Ontario trades, and a general contractor will ask for a clearance before your first payment.
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General information only, current at August 2026. Tax rules change and GST/HST status is fact-specific. Confirm your own position before relying on anything here.