The Level Index: How 2,200 Contractors Stack Up on Margin, Cash, and Pricing

The Problem with Contractor Benchmarks

Search "contractor profit margins" or "HVAC benchmarks" and you'll get one of two things: a survey where 200 contractors self-reported their numbers (with all the accuracy that implies), or a blog post telling you to "aim for 35-50% gross margins" without any data behind it.

I've been on the other side of this. Building financial tooling used by 1,000+ commercial contractors, building accounting products around their real workflows, and seeing firsthand how invoicing, job costing, and collections actually played out. Before that, I was in private equity, underwriting contractor acquisitions where the gap between what owners thought their margins were and what the P&L actually showed could be seven figures.

The industry doesn't have a data problem. It has a publishing problem. The real numbers exist. Nobody puts them out there.

So we did.

Introducing the Level Index

Today we're launching The Level Index, a free, public benchmarking resource for contractors in the trades.

It's not a survey. It's not a gated whitepaper. It's a live tool built from anonymized operational data across 2,242 contractor companies representing $13.25 billion in job revenue, 2.5 million invoices, and 50,753 employees across HVAC, plumbing, electrical, mechanical, refrigeration and fire protection. Controls work is mentioned in the historical research narrative but has no separate characterized segment in the current contractor download.

These are the same benchmarks we use internally at Level when we advise $3-30M contractors on pricing, cash flow, and profitability. The difference is now anyone can see them.

The 9 Metrics That Matter

We didn't try to benchmark everything. We focused on nine operating metrics that help organize a review of cash, margin and commercial activity. Predictive strength and causal effects have not been tested; a percentile identifies a question to investigate, not what will make an owner wealthy.

Why these nine? Because they map to the three things a CFO can actually move: cash (collection rate, billing speed, billing capture), margin (SA profitability, bill rates, labor hour variance), and growth (quote conversion, pull-through, revenue per employee). Any resulting cash or profit improvement must be measured in the actual accounts; this research does not establish a two-quarter outcome for every contractor.

P10 through P90 are percentile positions, not performance ranks. Lower is better for billing speed and labor-hours overrun. Billing speed has no published full percentile row: the post-completion invoicer median is 7 days and the slowest decile waits about 30 days (n=733 overall). Quote conversion uses won / (won + lost), excluding pending quotes (n=794). Bill rates come from a mixed-use rate-card field; neither a rate nor its spread is a comparable price without matching field usage.

Billing capture is hours invoiced divided by hours logged on jobs. It is not technician utilization, which divides billable hours by total paid hours and therefore uses a larger denominator. The distinction is why the 97.1% median can be valid without implying that technicians spend 97.1% of every paid hour producing billable work.

The current metric definitions, samples, and machine-readable values are available in contractor.json, with calculation definitions in the methodology file. Those files are the citation source when a value on this page is updated.

For the full breakdown on each metric with context and case studies, see our master post: What I Learned Reviewing 1,000+ Contractor P&Ls.

Benchmarks by Job Type

Not all work is created equal. A service call has a completely different margin profile than an install project. That's why the Level Index breaks benchmarks down across six job categories:

• Service Calls, highest volume, fastest billing cycle, where labor margin matters most
• Maintenance Contracts, the recurring revenue engine; test price against actual delivery cost
• Install Projects, bigger tickets, longer cycles, where cost variance kills you
• Commercial Projects, retainage, progress billing, and the cash flow drag that comes with large-scale work
• Time & Materials, the margin comparison between T&M and flat rate, with cost and pricing assumptions to check
• Service Agreements, pull-through revenue, renewal-rate questions, and the measured agreement-margin distribution

Each page shows margin distributions, revenue patterns, and cost structure, all from real operational data, not what contractors told a surveyor they think their numbers are.

Benchmarks by State

Bill rates vary dramatically by geography. The recorded state values are averages of a mixed rate-card field, with the company count shown. They are not certified customer prices or comparable wage rates. British Columbia is a province; its currency basis has not been reconciled with U.S. records. The Level Index includes state-by-state data so you can benchmark against your actual market, not a national average that doesn't reflect your competitive landscape.

A few examples from the data:

For the full geographic breakdown and what drives regional variation, see Contractor Bill Rates by State and Trade. The Level Index includes interactive state-level views at levelcfo.com/benchmarks.

Why We're Giving This Away

This is the question I get from other founders: why publish your best data for free?

Two reasons.

First, contractors making decisions blind hurts the industry. Fictional scale examples explain the stakes without claiming client results: a $20M agreement book at a negative 20% gross margin loses $4M before overhead. A business billing $300M and collecting 85% over an assumed matched period has a $45M billed-to-cash gap. The second amount is not automatically receivables, recoverable cash or a permanent loss. Reconcile dates, credits, retainage and disputes before counting an improvement. Benchmarking identifies the question; it does not determine the recovery.

Second, this is how Level works. We run the finance operating layer for contractors. A 72% collection ratio compared with P75 at 92.7% is a gap worth reconciling and, if confirmed, addressing. Match the billing and receipt windows, credits and retainage before counting recoverable cash. The Level Index is the diagnostic. Level is the treatment.

We'd rather compete on execution than on information asymmetry.

Source and claim note

The original Level Index research cohort contains 2,242 anonymized contractor companies, $13.25B in job revenue, 2.5M invoices, and 50,753 employees. That full-cohort research supports the directional operating distributions on this page, including pull-through. Each current Level Index metric has its own definition and sample shown on the benchmark library. Use the research to identify the question, then use job-level and account-level data to make the decision.

For external context, compare public contractor disclosures through the SEC's EDGAR database and occupation data through the Bureau of Labor Statistics. Use the gross-profit-per-hour calculator or Level's contractor finance service to connect the benchmark to your actual systems.

Honest Caveats

A few things to keep in mind when using the Level Index:

The data skews commercial. The majority of contractors in the dataset are commercial and industrial operators: HVAC, mechanical, refrigeration, fire protection. Residential-only contractors will see different margin profiles, faster payment cycles, and no retainage. The benchmarks are directional for residential, but most precise for commercial.

Not all trades are equally represented. HVAC and mechanical have the deepest data. Electrical and plumbing are also named segments. Historical research discussions include controls work, but the current download does not separately characterize a controls cohort. Trades like landscaping and roofing have limited coverage in this dataset.

Benchmarks are not targets. A 96% collection ratio is the recorded P90, not a demonstrated attainable target for every shop. If you're at 70%, start by reconciling invoice aging, credits, retainage and cutoff timing. The job is to understand the gap, investigate possible causes (slow invoicing, retainage management, weak AR follow-up), and close it systematically.

Local market conditions matter. The $79/hr cross-trade median comes from an inconsistently used rate-card field, so it is not a certified customer price in Manhattan or rural Alabama. The geographic table includes British Columbia; currency normalization is not documented here, so do not use its dollar values as US-state price equivalents. Always benchmark against your regional data first.

The Bottom Line

Revenue alone does not show where your pricing, billing or job costs compare with eligible peers. Start with a measured gap and test the operating mechanism behind it. The Level Index gives you that visibility for free. No paywall, no gated PDF, no sales call required.

Explore the Level Index →

If you want to go deeper, connect your QuickBooks and FSM, compare the eligible fields against the index, and get a roadmap for closing the gaps, that's what Level's free profitability audit is for. The initial assessment targets 48 hours after the necessary records and access are ready. We assess supported metrics, identify data gaps and review the findings with you before recommending actions; the audit is free.

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Q: Is the Level Index free? A: Yes. The full benchmark tool at levelcfo.com/benchmarks is free to use. No account required. We also offer a downloadable Level Index 2026 report with additional context and analysis.

Q: Where does the data come from? A: The original research universe contains anonymized operational records from 2,242 contractor companies, including invoices, job costs, payroll records, and quotes, representing $13.25 billion in job revenue. Each published metric uses its own eligibility rules and therefore has its own smaller sample. The current metric-level values and definitions are downloadable in contractor.json.

Q: How do I compare my specific business to the Level Index? A: Book a free profitability audit. We connect to your QuickBooks and field service software (ServiceTitan, Jobber, Housecall Pro), pull your actuals, and compare each eligible measure with its stated Level Index sample. Missing agreement, time-budget or invoice fields remain unavailable rather than becoming zeros. The initial assessment targets 48 hours after the necessary records and access are ready; missing data can change timing and scope. A person reviews the findings, and the audit is free.

Q: How often is the Level Index updated? A: The current edition is the Level Index 2026. Check the observation period, actual review date and dated revision notes in the downloadable data; a page revision does not imply that every underlying observation is new.

Q: What trades does the Level Index cover? A: The current contractor download names HVAC, plumbing, electrical, mechanical, refrigeration and fire protection. Controls work appears in historical research discussions but has no separately characterized current segment. Landscaping and roofing have limited coverage and should not be treated as representative trade-specific samples. Coverage depth varies by trade. HVAC and mechanical have the richest data. We're expanding coverage as our dataset grows.

Q: I'm a residential contractor. Are these benchmarks relevant to me? A: Directionally, yes. The core metrics (collection rate, billing speed, quote conversion) apply regardless of market segment. But the margin benchmarks and bill rate data skew commercial. Use the numbers as a starting point, not a direct comparison. We're building residential-specific benchmarks for a future update.