How Much Money Do Electrical Contractors Make in 2024?
Jobs in the technical trades are becoming increasingly popular as demand outpaces the supply of skilled workers. This shortage is driving up wages, especially for entry-level positions, making these fields more attractive to newcomers.
Electrical work is an excellent choice if you want to enter the trades. Whether you open your own business or take a salaried position at a large company, your potential to earn a great living is high. More importantly, you’ll build a solid career with a considerable amount of security.
The shortage of electrical workers highlighted in 2022 has only grown. With roughly 10,000 electricians leaving the workforce every year and only 7,000 stepping in to replace them, now is a prime time to become an electrician…and reap the benefits of a job in demand.
How to Understand the Differences in Reported Wages.
When discussing wages, three factors should be considered: basic statistics, union vs. non-union workers, and prevailing wages.
Basic Statistics
It’s important to understand the difference between the median and mean (or average) when listing salaries. The median is the middle value, where half the values are lower and half are higher. For example, in a string of five numbers ranging from lowest to highest, the third number in that string is the median. Statistically, this number more accurately reflects the truth because it eliminates the outliers, really high or really low numbers … or, in the case of salaries, unusually high or low salaries.
Union vs Non-Union Workers
There are differences between union and non-union workers in the trades. Non-union workers negotiate salaries on their own behalf. They can work for large companies, contractors, or individual homeowners, or they can also be in business for themselves. Non-union workers set their own wages or negotiate their own pay with their employers.
On the other hand, union workers have their wages negotiated by the union, in this case, the International Brotherhood of Electrical Workers (IBEW). The electrical union diligently advocates on behalf of its members for higher wages, work conditions, and benefits.
Prevailing Wages
Finally, the Davis-Bacon and Related Acts (DBRA) require workers to be paid prevailing wages set by the government for federally funded or assisted construction projects. Prevailing wages differ from state to state and municipalities within each state.
While prevailing wages are the minimum required for electricians working on federally funded projects, non-union workers can use them as a starting point for negotiating more pay.
Now let’s dive into the numbers.
How Much Money Does an Electrical Contractor Make?
According to the U.S. Bureau of Labor Statistics, the median annual income for an electrician in 2023 was $61,590. An Indeed.com survey (September 2, 2024) reports an average annual salary of $64,300, with the lowest reported salary being $38,901 and the highest $106,343.
The International Brotherhood of Electrical Workers (IBEW) reports salary ranges from $43,000 in Kingsport, TN, to $182,500 in San Francisco, CA. IBEW salaries are reflective of members only and vary considerably based on location.
Prevailing wages are set by the government and posted on the SAM.gov website. The site is a little tricky to navigate. Begin by selecting Construction (DBA) on the left in the box labeled Wage Determinations. Select the state and county where you wish to work. The results will appear to the right of the box. Click on the Davis-Bacon Act WD number (in blue), and another screen will open, listing every trade, job description, and prevailing wage for the individual job description. For example, in San Francisco, CA, the prevailing wage for an electrician performing residential electrical work is $54.75 per hour, and in Hawkins County, TN, where Kingsport is located, the prevailing wage is $18.52 per hour.
Experience, Qualifications, Education, and Training Matter.
There's a big difference between a regular journeyman electrician and an electrical contractor. Where electricians work for a business or company that employs other electricians, the contractor is the owner of that firm. The responsibilities are greater, but so is the pay.
Several factors that go into the day-to-day work of being an electrical contractor also impact how high your salary will be. The four main factors are your level of experience, qualifications, the industry you're working in, and your location.
Experience
Earning potential increases with experience. In all states, electricians begin as trainees or apprentices and work their way up to becoming electrical contractors. Many states offer journeymen and master electrician licenses—with a salary boost at each step.
Experienced electricians can negotiate better pay. They also have a broader pick from the available positions.
Qualifications, Education, and Training
Pay is contingent on the number of qualifications you earn, your level of education, and how much professional training you bring to the role. There are many paths toward becoming an electrician, including apprenticeship, technical school, or working your way up through a family business.
Most apprentices are paid, which means you begin earning from the very beginning.
Industry
The electrical industry is vast. Generally, there are four basic types of electricians: outside linemen, inside wiremen, installation technicians, and residential wiremen. Within those basic types, there are areas of specialization, including residential, commercial, industrial, maintenance, installation, and construction electricians.
Different specialties command different rates.
Location
As is evident from the prevailing wage schedules above, location plays a role in how much you earn. However, competition is also a factor. If fewer jobs are available for the number of electricians applying, wages will be lower. Wages also factor in the cost of living within a specific location, and sometimes, that’s not reflected accurately. It is important to consider the wage and the cost of living when choosing where to work.
Frequently Asked Questions
How Much Profit Do Electrical Contractors Make?
How much profit electrical contractors make is different from how much money they earn. An electrician who works under someone else will keep most of their earnings to save or spend on regular living expenses like rent, utilities, and food.
Electrical contractors have a whole host of tabs to pick up at the end of each month, quarter, and year. When you own your own business, you are responsible for payroll taxes, income taxes, insurance, supplies costs, marketing expenses, and more. You should allocate 30 to 40% for taxes, 1 to 5% for insurance, and another 30% for operating expenses—for a total of 60 to 80%. Still a 20% profit on every job can equate to a great annual income!
Can an Electrical Contractor Make 6 Figures?
It's certainly possible to make six figures as an electrical contractor, but there are several factors to consider, including:
- Cost of employees. There is a balance between having experienced employees who are paid more and newbies who need a lot of oversight but are paid much less.
- Certifications and specialties. Sepcializing in a certain aspect of electrical contracting and getting the training and certifications necessary will allow you to charge more. Certifications can also set you apart from the competition, giving you a leg up when bidding on jobs.
- Location of your business. Find a location where there is enough demand for electrical work and enough people to support the work.
- Cost of living. Wages are often tied to cost of living, meaning that in expensive areas, your payroll will be higher. On the flip side, in high-cost areas, you can typically charge more.
Forging a Path of Your Own
It's not overly difficult to become a competent, high-earning electrical contractor. It takes training, professional experience, and dedication. There will always be a demand for high-quality electrical work, whether that’s new construction or retrofitting older or outdated electrical systems.
Understand what you need to set up a robust practice, pick the right location, and get to work.
Are you getting ready for the journeyman, residential, or master electrician exam? Check out Contractor Training Center’s exam prep courses for the National NASCLA Accredited Electrical Contractor Exams and set yourself up for success.