Where does the money go?
Most furnace cost guides give you a single total and call it a day. But evaluating contractor quotes requires knowing what is reasonable for each line item. Here is the full breakdown of a typical 2026 furnace install, equipment, labour, permits, removal, and ductwork.
The five line items
Equipment
The furnace itself: heat exchanger, burners or heating elements, blower, gas valve, controls. Varies by fuel, brand, AFUE, capacity, and stages.
$2,000–$7,500
Labour
6-14 hours of work for a 2-tech crew. Standard swap: 6-8 hours. Complex install with ductwork or fuel changes: 10-14 hours. Rates: $80-$160/hr.
$1,000–$3,000
Permits
Required in nearly every US jurisdiction. Includes mechanical inspection. Higher in big cities ($300-$400), lower in rural areas ($50-$150).
$50–$400
Old unit removal
Disconnect, dispose of refrigerants if AC integrated, recycle metal. Oil furnace removal is higher ($500-$1,500) because of oil tank handling.
$100–$500
Ductwork mods (if needed)
Most replacements need only minor return/supply adjustments ($200-$500). Full duct replacement is uncommon and runs $2,000-$5,000.
$0–$2,500
Furnace + AC combo install
Save $500–$1,500 by replacing both at once
Furnace and central AC share the blower, ductwork, and refrigerant lines. Replacing both at once means one labour visit, one permit, and matched SEER2/AFUE for paired efficiency. Combo total: $7,000 to $15,000. The bundled saving versus doing them in separate years is real, and if your AC is over 12 years old at the time of furnace replacement, the math almost always favours doing both.
Hidden costs to watch for
Smart thermostat upgrade
$150–$500
If your existing thermostat is incompatible with a new variable-speed furnace, plan on a Nest, Ecobee, or manufacturer-specific replacement.
Gas line resize
$200–$1,500
Higher-output furnaces sometimes need a larger gas line (3/4 inch instead of 1/2 inch). Inspector will catch undersized lines.
Electrical panel upgrade
$1,200–$3,500
Rare with gas furnaces. More common with electric furnaces or heat pump conversions where 60 amps of circuit capacity is needed.
PVC venting reroute
$300–$1,200
Required when upgrading from 80% AFUE (metal flue) to 95%+ AFUE (PVC vent). Distance to exterior wall determines cost.
Condensate drain
$100–$400
95%+ AFUE condensing furnaces produce water that must drain. Pump installation is needed if the unit is below the lowest drain.
Code compliance upgrades
Varies
CO detector requirements, return air resizing, combustion air provisions. Inspector will flag during permit close-out.
What the quote should show
A reasonable furnace quote in 2026 itemises these items separately. If a contractor gives you a single lump sum without a breakdown, ask for one. Compare apples-to-apples across three quotes:
- →Brand, model number, AFUE rating, BTU capacity, stage type
- →Equipment cost line item (separate from labour)
- →Labour hours estimate and hourly rate
- →Permit cost and confirmation contractor pulls it
- →Old unit removal and disposal
- →Any ductwork, gas line, or electrical work itemised separately
- →Manufacturer warranty terms and registration responsibility
- →Labour warranty (1-2 years standard)
- →Payment schedule (no more than 25-50% deposit)