Hourly vs commission vs flat rate for service electricians

Service electricians are usually paid one of four ways: straight hourly, commission, flat rate per task, or hourly plus spiffs. One October 2026 franchise ad uses a hybrid: $22.50 an hour for the first 30 days, then 20% of collected revenue minus materials. Whatever you pick, overtime still applies. Commissions, flat-rate pay and announced spiffs all go into the regular rate that overtime is figured on.

01The four plans side by side

Each plan pays for something different, so pick the one that pays for what you want more of.

There's no national data on which plan service shops use most. BLS doesn't break service electricians out from electricians in general (national median $30.38 an hour, May 2025, BLS OEWS). So read the job ads in your market and compare plan to plan, not just rate to rate.

If you're still at the stage of finding the right person for the truck, start with how to hire a residential service electrician. For where a service hire fits as your shop grows, see who to hire next.

02A real commission ad, line by line

Here's one service electrician ad, posted Oct 14, 2026 for a Mr. Electric franchise in Tennessee (job posting). It's one ad, not a norm, but it shows how a hybrid plan is built.

• First 30 days: $22.50 an hour.
• After 30 days: "100% Commission" at 20% of collected revenue minus materials and additional labor, plus bonuses and spiffs.
• Stated range: $46,800 to $100,000+ a year.
• After 120 days: medical, dental, vision, paid time off and a company vehicle.

A few things worth copying, and one worth thinking about:

• The hourly start is a training period. He learns the price book and the software before his check depends on them.
• Commission on collected revenue, not on sold. He doesn't get paid on a ticket the customer never pays.
• Materials come off the top. He can't pad his check by throwing parts at the job.
• The bottom of the range is the hourly rate. $22.50 x 2,080 hours is $46,800. The top is "+". Electricians read the bottom number. If you post a range, make the bottom one you'd be proud of.

Here's what 20% of collected revenue minus materials looks like in a week, as an example. Say he collects $9,000 and materials run $1,500. That's ($9,000 minus $1,500) x 20% = $1,500 in commission. Now see what happens to it in a 48-hour week.

03The overtime catch: commission and flat rate still count

Commission and flat-rate pay don't get you out of overtime. They go into the regular rate, and the overtime premium is figured on top.

The federal rule on commissions says they "are payments for hours worked and must be included in the regular rate," whatever the formula and however often they're paid (29 CFR 778.117). For flat rate (piece rate under the law), the regular rate is the week's total earnings divided by the total hours, and each hour over 40 gets half that rate on top (29 CFR 778.111).

Worked example: flat rate, 50-hour week

A service electrician on flat rate earns $1,350 in a 50-hour week.

The flat-rate earnings already paid him straight time for all 50 hours. What he's still owed is the half-time premium on the 10 hours over 40.

Worked example: commission, 48-hour week

Back to the $1,500 commission from the ad example, in a 48-hour week:

If your software only pays the percentage, someone has to add that premium every week he goes over 40. Busy season is when it bites, and it's also when nobody's checking.

Spiffs count too

A spiff you announce ahead of time ($100 per panel upgrade, say) goes into the regular rate. The regulations say bonuses "announced to employees to induce them to work more steadily or more rapidly or more efficiently," along with most attendance and production bonuses, are not discretionary and "must be included in the regular rate of pay" (29 CFR 778.211, 29 CFR 778.208).

Example: $28 an hour, 50 hours, $200 in spiffs.

Twenty dollars a week looks small. Across ten service electricians and a busy summer it's a back-wage claim.

The commission exemption has conditions

Federal law has an overtime exemption for some commissioned employees of a "retail or service establishment," section 7(i) of the FLSA. It applies only if his regular rate is more than one and a half times the federal minimum wage and more than half his pay over a representative period (at least a month) comes from commissions (29 USC 207(i)). Whether a residential electrical service shop counts as a retail or service establishment depends on your facts. Don't assume it applies. Talk to an employment lawyer before you stop paying overtime on a commission plan.

Also check the floor: in any week, his total pay divided by his hours still has to clear the federal and state minimum wage. A slow January week on straight commission can miss it.

04How to pick a plan

Pick by your call volume and how good your price book is, not by what the shop across town does.

1. Start every new hire hourly. Thirty to 90 days; the ad above uses 30. He learns your book and your software, and you learn whether he can run calls alone.
2. Low or uneven call volume: hourly plus spiffs. He's not punished for a slow Tuesday, and you still reward the panel he sells.
3. Steady calls and a real price book: commission or flat rate. Pay on collected revenue, take materials off the top, and run the overtime premium every week.
4. Write it down. One page: the rate or percent, what comes off the top, when it's paid, what happens on a callback, how overtime is figured. Have him sign it.
5. Price the change before you switch an existing hand. Moving a $30 hourly electrician to commission is a pay change he'll compare to his last 12 months. Show him the math with his own tickets.

On callbacks: some shops dock commission on a callback. Rules on deductions from wages vary a lot by state, so check with your employment lawyer before you put a chargeback in the plan.

Schedules matter as much as the plan. A service electrician on commission who's on call every other weekend is comparing you to a 4-10s construction job; see 4-10s, 5-8s or 6-10s: which schedule keeps electricians.

05What to say in the ad

Say the plan, the numbers and when each part starts. Electricians skip ads that hide the pay.

• Give the hourly start and the percent. "$25 an hour for 60 days, then 18% of collected revenue minus materials" tells him what he needs to know. (Example numbers, not a recommendation.)
• New York: employers with four or more employees must post a pay range, and "employers must also clearly state if a position is commission-based" (New York State Department of Labor).
• Other pay-range states: see which states require pay ranges in electrician job ads.
• Name the truck and the schedule. Take-home van, on-call rotation, hours. Those are part of the pay.

If you need a service electrician on the truck before the busy season, apply here and we'll see if we can put 5 licensed electricians in front of you in 14 days.

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