How do I calculate material costs for a trade job?

List every material the job requires, check current prices with your merchant or supplier, and add a waste allowance of 5-15% depending on the material. Always check prices before quoting rather than relying on memory from previous jobs.

How do I work out my labour rate as a tradesperson?

Start with what you want to earn annually, divide by the number of billable days you can realistically work (typically around 220), and that gives your minimum day rate. Factor in that not every day will be billable — you need to account for quoting, admin, travel, and quiet periods.

What overheads should tradespeople include in their pricing?

Common overheads include van costs (fuel, insurance, maintenance, finance), tool purchases and repairs, public liability insurance, accountancy fees, phone bills, software subscriptions, workwear, marketing costs, and any trade body memberships or certifications.

What profit margin should a tradesperson aim for?

Most tradespeople aim for a net profit margin of 10-20% on top of their labour and material costs. The right margin depends on your trade, your local market, and the type of work. Specialist or high-skill work can command higher margins than general labour.

Should I charge a day rate or a fixed price for trade work?

Day rates work well for jobs where the scope is uncertain or likely to change, such as maintenance and repair work. Fixed prices work better for defined projects like bathroom installations or kitchen fits, where the customer wants certainty and you can estimate the work accurately.

How to Price a Job as a Tradesperson — A Complete Guide

Getting your pricing right is one of the most important skills you can develop as a tradesperson. Price too high and you lose the job. Price too low and you end up working for next to nothing — or worse, at a loss. Yet despite how critical it is, most tradespeople learn to price jobs through trial and error rather than any structured approach.

This guide breaks down exactly how to calculate a fair, profitable price for any job — whether you are a plumber, electrician, builder, decorator, or any other trade professional working in the UK.

Start With Your Material Costs

The foundation of any job price is the cost of materials. This should be the most straightforward part of your calculation, but it is also where many tradespeople make their first mistake — underestimating what they will actually need.

Always price materials before you quote. Do not rely on memory or rough estimates. Check current prices with your suppliers, factor in delivery charges, and add a contingency of around ten to fifteen per cent for wastage and unexpected requirements. Materials prices fluctuate, so a quote you gave three months ago may not reflect today's costs.

If you are buying materials on behalf of the client, be transparent about this in your quote. Itemising material costs separately builds trust and avoids disputes later. For guidance on structuring this clearly, see our guide on what to include in a building quote.

Calculate Your Labour Rate

Your labour rate is not simply what you want to earn per hour. It needs to account for the fact that you will not be billing for every hour of the working week. Between travel time, quoting, admin, purchasing materials, and dealing with enquiries, most tradespeople only bill for around sixty to seventy per cent of their available hours.

To calculate a realistic labour rate, start with what you want to take home annually. Add your annual overheads (more on that below), then divide by the number of billable hours you can realistically achieve in a year. For most sole traders, that works out to somewhere between 1,200 and 1,500 billable hours per year once you account for holidays, sick days, and the unbillable tasks that fill every week.

If the resulting hourly rate seems high, remember that you are not an employee. You do not get paid holidays, sick pay, a pension contribution, or any of the other benefits that come with employment. Your rate needs to cover all of that.

Account for Your Overheads

Overheads are the costs of running your business that are not tied to any specific job. These include vehicle costs, insurance, tool purchases and maintenance, fuel, phone bills, accounting fees, marketing, software subscriptions, and any other recurring expenses. Many tradespeople overlook or underestimate their overheads, which is one of the main reasons they end up earning less than they expect.

Sit down once a year and add up every business expense you have. Divide that annual figure by your expected number of billable days, and you will know exactly how much you need to recover in overheads for every day you work. This figure should be built into your labour rate or added as a separate line in your calculations.

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Set Your Profit Margin

Once you have covered materials, labour, and overheads, you need to add a profit margin. This is the money that allows your business to grow — to invest in better tools, take on larger projects, build a financial buffer, and ultimately increase your income over time.

A healthy profit margin for most trade businesses sits between ten and twenty per cent on top of your total costs. Some tradespeople feel uncomfortable adding profit on top of their labour rate, but your labour rate covers your personal income and overheads — profit is separate. It is the return on the risk and effort of running a business, and every successful business builds it into their pricing.

Research Your Competitors

Knowing what other tradespeople in your area charge for similar work gives you essential context. You do not want to be the cheapest — that is a race to the bottom. But you also do not want to be significantly more expensive than everyone else without a clear reason.

Check local Facebook groups, ask fellow tradespeople, and look at online directories to get a sense of the going rate. If your calculated price is higher than average, consider whether you can justify that through better quality, faster turnaround, more professional presentation, or additional guarantees. Often, presenting your quote professionally is enough to justify a higher price — clients associate polished proposals with quality workmanship.

Present Your Price Professionally

How you present your price matters just as much as the number itself. A well-structured, professional quote gives the client confidence that you are organised, reliable, and worth the money. A vague text message with a single number does the opposite.

Your quote should include a clear description of the work, an itemised breakdown of costs, a realistic timeline, your payment terms, and a validity period. This is not about creating unnecessary paperwork — it is about making it easy for the client to say yes. When a homeowner is comparing three quotes, the one that looks professional and explains everything clearly will almost always win, even if it is not the cheapest. We cover this in detail in our article on how to write a professional building quote.

If writing detailed proposals takes you too long, tools like QuoteSmith can generate branded, professional PDF proposals in minutes. You enter the job details and line items, and the AI writes the scope of work, timeline, and terms for you — so you can respond to enquiries the same day and win more work with professional proposals.

Putting It All Together

Pricing a job correctly is not guesswork. It is a straightforward calculation: materials plus labour plus overheads plus profit. The tradespeople who take the time to work through this properly earn more, stress less about money, and build more sustainable businesses.

Get your pricing right, present it professionally, and you will find that clients are far more willing to pay a fair rate when they can see exactly what they are getting for their money.