Many service owners price an AMC by looking at a competitor's rate and going slightly lower. That works until a contract with three breakdown calls and two replaced parts turns out to have lost money. A simple cost build-up gives you a floor price you can defend.
How to calculate AMC charges: Step 1: List what the contract will cost you
- Scheduled visits: technician time, travel and consumables for each planned visit.
- Breakdown calls: the expected number of extra visits in a year for this kind of equipment.
- Parts: zero for labour-only contracts; an expected cost for comprehensive ones.
- Overhead: coordination, billing, renewal follow-up and a share of the vehicle.
Step 2: A worked example (illustrative, not market rates)
A non-comprehensive AMC for one split AC with two services a year:
- 2 scheduled services at ₹300 cost each = ₹600
- 1 expected breakdown visit at ₹250 = ₹250
- Overhead share = ₹150
- Total cost = ₹1,000
- With a 30% margin, price = ₹1,000 ÷ 0.70 = about ₹1,430
Compare that with what the customer would pay for two single visits. If two separate visits cost them ₹1,200, an AMC at ₹1,430 is not attractive, so either cut cost per visit or add value, such as priority response.
Step 3: Add parts risk for comprehensive contracts
If you cover parts, take your average parts cost per unit per year from past jobs and add a safety margin. Cap what is covered (for example, excluding compressors or boards) and say so in the contract. See the AMC contract clauses to write exclusions clearly.
Step 4: Check it against the market and the customer
A price is only good if customers accept it. Compare with local competitors, with what a single visit costs, and with the value to the customer of not having a breakdown. Offer two tiers (labour-only and comprehensive) so the customer can choose.
Step 5: Review at every renewal
Look at the real cost of each contract: visits done, breakdowns, parts used. Reprice the loss-making ones, or move them to a different plan. ServicePilot keeps jobs and parts against each AMC contract, so that review is a list, not a hunt through notebooks.
Treat this how to calculate AMC charges guide as a starting point and adapt it to your own business. If you would like help applying the how to calculate AMC charges to your own services and customers, book a demo and we will walk through it with you.
