How to price a job so you actually make money

Plenty of tradespeople are busy all year and still broke. The work is not the problem. The pricing is.

If you price only the hours you can see, you are paying for the job yourself. This guide shows you how to build a price that covers everything and leaves profit at the end.

The price formula

Every job price has five parts. Miss one and it comes out of your pocket.

1. Labour. Your time on the tools, priced at your real day rate. Not the wage you earned as an employee. Your rate as a business. More on this below.

2. Materials, plus markup. The cost of everything you supply, plus a markup for handling it. You order it, you carry it, you warrant it. That has a value.

3. Overheads. The running costs of your business. Van, fuel, insurance, tools, phone, software, accountancy, training, advertising. Spread across every job you do.

4. Profit. Paid after everything above, including your own wage. This is what grows the business and covers quiet months, bad debts, and the next van.

5. VAT, if you are registered. Add 20 percent on top. VAT is not profit. It belongs to HMRC.

Work out your real day rate

The day rate formula is simple. Add up your target yearly income, your yearly overheads, and a tax buffer. Divide by the number of days you can actually bill.

That last part is where most people go wrong.

There are about 220 working weekdays in a year. But you will not invoice all of them. Holidays, sickness, quoting, ordering materials, paperwork, travel, training, and gaps between jobs eat into it. Most sole traders bill between 150 and 180 days a year.

So if your business needs £54,000 before profit, dividing by 165 billable days gives about £327 a day before any material markup. Your number will be different. The point is to calculate yours instead of copying someone elses.

A plumber charging £220 a day for labour may keep far less than they think after fuel, van costs, insurance, tools, phone, accountancy, advertising, tax, and pension. If the rate only works with five or six paid days every week, it is not sustainable.

Markup is not margin

These two words get mixed up and it costs people money.

Markup is added to cost. If labour and materials cost £10,000 and you add 20 percent markup, the selling price is £12,000.

Margin is the share of the selling price you keep. That £2,000 profit is about 16.7 percent of £12,000. If you want a true 20 percent margin on a £10,000 cost, the selling price must be £12,500.

Know which one you mean before you write the number down.

What to charge on materials

A common approach is a sliding scale. Smaller items carry a bigger percentage because the handling is the same whatever the price.

Many UK trade guides suggest roughly these bands. Around 30 to 50 percent on small sundries under about £100. About 20 to 25 percent on typical job materials between £100 and £1,000. About 10 to 15 percent on major supply above that.

Whatever you choose, apply it from the trade price you paid and keep your merchant discount. That discount is yours.

How much profit to add

A sensible target for a small trade firm is 10 to 20 percent profit on top of total cost, and that is after paying yourself a proper wage. Newer businesses or tough markets sit nearer 10 percent. An established firm with a full diary should run nearer 20.

Here is a useful rule. A full diary is the market telling you that you are cheap.

Profit is not greed. It pays for the van replacement, the bad debt, the warranty callback, and the quiet February.

Quote or estimate

Know which one you are giving. A quote is a fixed price for defined work. Once the customer accepts it, you carry the risk of overrun. An estimate is your informed prediction of cost. It is expected to move as the job reveals itself, so the customer carries the risk.

Quote when you control the variables. Estimate when the job cannot show you its cards, like opening up old walls or groundwork. Put the word you mean on the paper.

Mistakes that eat your margin

Pricing from photos. Visit complex jobs. Photos hide access problems, parking nightmares, and rotten timber.

Forgetting the small costs. Waste, parking, delivery, fuel, consumables, and the hour spent collecting materials. Each one is small. Together they are a days profit.

Free extras. While you are here jobs set a precedent. A £150 unpriced extra can be most of a days entire profit. Price it on the spot, get agreement in writing, and add it to the invoice.

No written scope. A verbal price with no written scope is a dispute waiting to happen. Write down what is included and what is not.

Letting quotes go stale. Material and supplier prices move. Give your quote a validity period, often 14 or 30 days for domestic work. Do not leave a price sitting in someones inbox for six months.

Treating your labour as profit. Your day rate must cover your time, tools, vehicle, insurance, admin, holidays, training, and tax before there is any profit left.

When the customer says it is too expensive

That sentence is not a verdict. It is the opening line of a conversation.

Hold the number and walk them through what is in it. If the budget is genuinely short, change the scope, never the rate. Strip the decorating. Keep the existing radiators. Park phase two until spring. Your rate never moves.

How PlusWise helps

PlusWise lets you build quotes from your own price list and send them to the customer. When the job is done, the quote turns into an invoice in one step. Your expenses and materials sit against the job, so you can see what it really cost and where your pricing needs work.

Price it properly once. Then let the software do the paperwork.

Quick answers

What is a typical day rate for a UK tradesperson? Published trade cost guides put a typical skilled trade day outside London between £200 and £350, with electricians and gas engineers often £280 to £500. London and the South East run roughly 30 to 45 percent above the national middle. Use these as a reference, then build your own rate from your real costs.

Should I show the breakdown to the customer? A clear breakdown builds trust. Labour and materials in short readable lines, one bold total, the VAT position, and what is included and excluded. Customers accept a fair process far better than a low estimate that changes later.

How do I handle price rises on long jobs? Get written supplier prices close to the quote date and note how long they are valid. If the job starts months later, say in writing that key material costs may need reconfirming before work begins.

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Sources checked September 2026: trade pricing guides from tradehand.com, bookabuilderuk.com, and proplaybooks.co.uk.