Technician Pay Structures + Compensation Design
Why this matters
How you pay your techs determines what they do. Pure hourly = techs slow down OR stretch jobs. Pure commission = techs upsell aggressively OR cut corners. Wrong structure attracts wrong people + drives wrong behavior. The right pay structure aligns tech incentives with what's actually good for customers + the business. There's no universal right answer; there are right answers FOR YOUR business + your operating model. This is the working framework.
Five common structures
1. Straight hourly
- Tech paid $X/hour for clock time
- Simplest; most common starter structure
- Pro: easy admin; clear to tech
- Con: doesn't reward productivity OR revenue generation
- Best for: apprentices, helpers, new techs
2. Hourly + bonus
- Hourly base + monthly OR quarterly bonus based on metrics
- Bonus often tied to crew revenue OR individual KPIs
- Pro: floor income + upside; basic incentive
- Con: small bonuses don't drive behavior
- Best for: most established techs
3. Commission-only / pay-per-job
- Tech paid X% of jobs they complete (typically 8 - 20%)
- No hourly base
- Pro: pure performance pay; drives productivity
- Con: tech may cut corners OR upsell aggressively; legal risk in some states (minimum wage compliance during slow periods)
- Best for: established sales-oriented techs in performance-driven shops
4. Hourly + commission
- Hourly base + commission percentage on revenue / sales
- Most popular among established service businesses
- Pro: floor income, performance upside
- Con: more complex tracking; commission tied to billed revenue OR collected revenue (decide)
- Best for: mid-to-senior techs
5. Salary + bonus
- Annual salary with quarterly OR annual bonus
- Used for office staff + senior techs + managers
- Pro: predictable income; senior-level positioning
- Con: doesn't naturally scale with revenue generation
- Best for: service managers, senior installers, foremen
Choosing the structure (key questions)
1. What behavior do you want?
- Productivity (jobs/day)? Reward billable hours
- Revenue generation? Reward sales / upsell
- Customer satisfaction? Reward survey scores
- Quality / no callbacks? Reward low callback rate
- Multiple? Balance + weight
2. What level of admin complexity can you support?
- Bonus / commission requires tracking + calculation each pay period
- Software (Service Titan, Manuall) automates; manual = hours of accounting
3. What's the legal risk in your state?
- Commission-only is illegal OR restricted in some states (must meet minimum wage)
- Trades with WC class-code differences for commission vs wage
4. What's your team's existing expectations?
- Existing hourly team conversion to commission is disruptive
- New hires onboarded with commission-oriented program
Working examples by trade
- Plumbing/HVAC: modest hourly base + 8 - 15% commission on sold revenue + small per-add spiffs + monthly callback/rating bonus. A senior tech on a profitable route earns well into the upper range for the trade.
- Electrical: hourly + smaller commission OR salary for senior
- Roofing: sales-tech commission-heavy (50 - 80% of close); production hourly OR per-square; PM salary + completion bonus
- Cleaning: per-visit + upsell bonus OR salary for leads
- Pest control: salary + route-renewal bonus OR per-stop
- Tree service: per-job piece-rate; salary for arborist/lead
Spiffs + incentives
Spiffs = small immediate bonuses for specific actions:
- Selling an annual maintenance contract
- Selling a system-replacement quote
- Getting a customer to leave a Google review
- Same-day complete-on-arrival
Pro: instant reinforcement; visible behavior driver. Con: can be gamed; need controls.
Most effective when:
- Specific behavior tied to real business value
- Track + verify (CRM-recorded)
- Paid at next pay period (visible reward)
Pay-per-performance compensation issues
Minimum wage compliance (FLSA):
- All hours worked, employee must earn at least federal/state minimum wage
- Commission-only employees: in slow weeks, base must guarantee minimum wage
- Failure = wage + hour lawsuit + DOL action
Overtime calculation:
- Non-exempt employees get OT on hours over 40/week
- Commission AND hourly: commission included in regular rate for OT calculation
- Tracking complexity increases with commission OR bonus structures
Reasonable rate of pay:
- If commission-based pay creates effective hourly rate too low: violates labor standards
Vesting periods on bonuses (the retention tool)
For senior tech bonuses:
- Annual bonus paid 50% in March + 50% in June (vests over time)
- Employee who leaves between payments forfeits remaining bonus
- Retains employees through full year
- Common once the annual bonus reaches a meaningful multi-week-pay level
Specific designs that work
- Master Pay Plan (Lipsey): solid hourly base + 5% revenue + 2% crew bonus + spiffs. Puts a senior tech's total comp well above the trade's median and retains experienced talent.
- Sales Performance Plan: hourly base + 8 - 12% commission + 5% replacement-sale bonus. Drives upsell + new equipment.
- Project Manager Plan: salary + quarterly project margin bonus + annual route bonus + profit-sharing. For foremen + leads.
Communicating pay clearly
Employees need to understand HOW they're paid + HOW to maximize:
- Written pay plan distributed
- Examples worked through
- Live tracking visible (CRM dashboard)
- Monthly review with manager
- Update annually with business owner
Vague pay = disengaged tech. Clear pay = engaged tech who optimizes for the behaviors you want.
Reviewing + adjusting
Annual review of pay structure:
- Are top performers paid like top performers? (gap to second-tier should be visible)
- Are you losing techs to competitors paying differently?
- Are spiffs driving desired behavior?
- Is OT being managed (over-OT = under-staffed)?
Adjustments:
- Senior tech tier upgrades
- Commission percentage tweaks
- New spiffs for new behaviors
- Spiff retirement when behavior is now default
Pay benchmarks (2025 service trades)
Median wages by tier (varies by region):
- Helper / Apprentice: entry hourly rate, low end of the trade's scale
- Entry tech (1 - 3 years): modest step up from apprentice rate
- Journey tech (3 - 7 years): solidly mid-scale, the bulk of a shop's workforce
- Master / Senior: top of the hourly scale, or salaried at a level well above journey tier
- Service Manager: salaried, above the top field-tech rate
- General Manager: salaried, the highest tier on the org chart, often more than double the Service Manager level
Commission tops can add a substantial five-figure amount to senior techs in good markets.
Geographic + trade-specific variation is wide. Check local benchmarks (Glassdoor, Indeed, BLS, trade-specific surveys).
The single most-impactful compensation move for a service business stuck on pure hourly is adding a MAINTENANCE CONTRACT spiff. Pay tech a flat bonus for every maintenance plan sold at the service call. The tech who knows there's a payout per signed contract WILL find the opportunities + close them. Customers buy the plans because they make sense + saving long-term. The business gets recurring revenue (the gold of service business). Everyone wins. This single change typically lifts maintenance plan attach rate from 5 - 10% to 25 - 40% of service calls.
References
- US Department of Labor FLSA Wage + Hour
- Industry compensation surveys (PHCC, NECA, ACCA)
- "Service Business Compensation Plans" trade publications
- Manuall internal: Hiring Your First Technician, Conduct Performance Reviews That Actually Work