Last reviewed: September 2026 · By the HVAC Brief Editorial Team · Our sourcing and editorial standards
There were 111,207 plumbing, heating and air conditioning contractor establishments with paid employees in the US in 2023, and 58.3% of them employed fewer than five people, according to the Census Bureau’s County Business Patterns.
Starting one is federally simple and locally complicated. There is no federal contractor licence, but a business can only buy refrigerant if it employs an EPA certified technician, and licensing is set by states and localities.
How big the trade is
The contractor industry grew on every measure between 2022 and 2023, and payroll grew fastest: up 8.9% against 3.2% more employees.
| NAICS 238220 | 2022 | 2023 | Change |
|---|---|---|---|
| Establishments | 109,601 | 111,207 | +1.5% |
| Employees, mid-March | 1,176,759 | 1,214,761 | +3.2% |
| Annual payroll | $82.24B | $89.52B | +8.9% |
| Payroll per employee | $69,883 | $73,693 | +5.5% |
| Average employees per establishment | 10.7 | 10.9 |
One caveat shapes every number here. The federal industry code, NAICS 238220, covers plumbing, heating and air conditioning contractors together, and Census does not publish HVAC-only firms separately. County Business Patterns also counts only establishments with paid employees, so a one-person business with no payroll is not in these figures.
Most firms are small
A business with fewer than five employees is the typical contractor, not the exception. Only 1,656 establishments, 1.5%, employ 100 people or more.
| Employees | Establishments, 2023 | Share | Cumulative |
|---|---|---|---|
| Fewer than 5 | 64,871 | 58.3% | 58.3% |
| 5 to 9 | 20,587 | 18.5% | 76.8% |
| 10 to 19 | 13,148 | 11.8% | 88.7% |
| 20 to 49 | 8,384 | 7.5% | 96.2% |
| 50 to 99 | 2,561 | 2.3% | 98.5% |
| 100 to 249 | 1,300 | 1.2% | 99.7% |
| 250 to 499 | 256 | 0.2% | 99.9% |
| 500 to 999 | 76 | 0.1% | 100.0% |
| 1,000 or more | 24 | 0.0% | 100.0% |
For a new owner, that distribution cuts both ways. Small is a normal starting point, and most competitors are also small; but the few large operators have scale in purchasing, marketing and hiring that a start-up does not.
How HVAC firms are organised
More than two thirds of contractor establishments belong to S corporations, and the share of sole proprietorships is shrinking.
| Legal form | 2022 | 2023 | Change | Share, 2023 |
|---|---|---|---|---|
| S corporation | 73,280 | 76,190 | +4.0% | 68.5% |
| C corporation | 16,103 | 15,841 | -1.6% | 14.2% |
| Sole proprietorship | 12,858 | 11,821 | -8.1% | 10.6% |
| Partnership | 7,306 | 7,299 | -0.1% | 6.6% |
| Nonprofit | 43 | 42 | -2.3% | 0.0% |
| Other | 11 | 14 | +27.3% | 0.0% |
This shows what existing firms do, not what a new one should do. Entity choice is a tax and liability decision for an accountant or attorney who knows your state.
What is required federally, and what is not
Federal rules for an HVAC business are mostly about refrigerant and employment. Licensing to contract is not federal.
- Refrigerant purchasing. EPA’s sales restriction says “Only EPA-certified technicians are allowed to purchase” ozone-depleting refrigerants or their non-ozone-depleting substitutes, with limited exceptions. An employer can buy if it gives the wholesaler written evidence that it employs at least one properly certified technician.
- Technician certification. Technicians who maintain, service, repair or dispose of equipment that could release refrigerant need Section 608 certification. See what the EPA 608 certification covers.
- Employer registration. A business with employees needs an employer identification number from the IRS and has federal payroll tax obligations.
- Everything else is state or local. Contractor licensing, business registration, insurance and workers’ compensation requirements, and permits vary by state and often by city or county. No federal source consolidates them.
Labour is the constraint to plan around
Hiring costs more every year. Average hourly earnings at plumbing, heating and air conditioning contractors reached $42.61 in July 2026, a preliminary BLS figure, up 40.2% from $30.39 in 2019.
Employment in the same industry was 1,355,400 in July 2026, also preliminary, up 18.8% from the 2019 average. More on pay in what HVAC contractors pay and the latest employment and wage readings.
County Business Patterns counts 1,214,761 employees in the pay period including March 12, 2023. The BLS Current Employment Statistics survey puts the industry at 1,355,400 in July 2026. They are different surveys, three years apart, and both include plumbing. Use CBP for firm structure and CES for the current trend.
Frequently asked questions
How many HVAC companies are there in the US?
Census County Business Patterns counted 111,207 plumbing, heating and air conditioning contractor establishments with paid employees in 2023. That code includes plumbing contractors, and it excludes businesses with no payroll, so no federal source gives an HVAC-only count.
Do you need a license to start an HVAC business?
There is no federal contractor licence. Licensing is set by states and often by cities or counties. Federally, technicians who handle refrigerant need EPA Section 608 certification, and a business can only buy refrigerant if it employs at least one certified technician.
Can an HVAC company buy refrigerant without certification?
Only with a certified technician on staff. EPA allows an employer to purchase refrigerant if it provides the wholesaler with written evidence that it employs at least one properly certified technician. Only Section 608 certified technicians can buy refrigerant intended for stationary air conditioning equipment.
Are most HVAC businesses small?
Yes. In 2023, 58.3% of plumbing, heating and air conditioning contractor establishments had fewer than five employees, and 1.5% had 100 or more, according to Census County Business Patterns.
Methodology and limitations
Establishment, employee, payroll, size and legal form figures are County Business Patterns 2023 and 2022 national files for NAICS 238220. Earnings and employment trends are BLS Current Employment Statistics series CEU2023822003 and CEU2023822001; July 2026 values are preliminary and subject to revision.
- NAICS 238220 includes plumbing contractors, and CBP counts establishments, not firms.
- Nonemployer businesses are excluded from CBP.
- We publish no revenue, margin or start-up cost figures, because CBP does not measure them and we do not use vendor surveys.
- Nothing here is legal, tax or licensing advice.
Sources
- US Census Bureau, County Business Patterns, 2023 and 2022, NAICS 238220.
- US Environmental Protection Agency, Refrigerant Sales Restriction.
- US Bureau of Labor Statistics, Current Employment Statistics series CEU2023822001 and CEU2023822003.
The HVAC Brief is an independent trade publication. We do not sell equipment, take manufacturer advertising, or accept payment for placement in our research. Corrections welcome.
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