A price plucked from the air is either too low and you lose money, or too high and you lose the job. Here is a method you can run on the drive.
13 October 2026 · 6 min read
Most tradies price a job by gut feel: what the last one cost, what the bloke down the road charges, what the customer looks like they will pay. Sometimes it lands. Often it leaves money on the table without you ever knowing. Pricing properly is not complicated — it is five numbers added up in the same order every time.
Everything else is built on this, and most people set it too low because they divide by the wrong number of hours. Start with what you want to earn in a year before tax, add your yearly overheads (van, fuel, insurance, tools, phone, software, accountant), then divide by the hours you can actually bill — not the hours you are working. Travel, quoting, buying materials and admin are real hours, but no customer pays for them directly.
Worked example: £40,000.00 target plus £10,000.00 overheads is £50,000.00. Forty-six working weeks at five days and six billable hours a day is 1,380 hours. £50,000.00 ÷ 1,380 = £36.23 an hour, so round up to £38.00. Our hourly rate calculator does the sums for you.
Break the job into stages and put a time on each — strip out, first fix, making good, clear up. Then add the bits everyone forgets: getting set up, the trip to the merchant for the part you did not know you needed, and tidying the site. If you have done the job ten times before, you know the number. If you have not, add a buffer of 15–25% and say so to yourself before you say a price to the customer.
Price materials at what you pay, then add a markup for the time spent sourcing them, collecting them, and the risk of returns and breakages. Ten to twenty per cent is common, and it is entirely legitimate — see marking up materials for how to explain it if a customer asks. On a job with £60.00 of parts at 15%, that line becomes £69.00.
These are the costs that quietly eat a margin. A London job with £15.00 of parking a day, a tip run, or an hour of driving each way is a different job from the same work round the corner. Either build them into the price or list them as separate lines, but never leave them out because they feel awkward to mention.
Old houses, unknown pipework, work behind tiles — anything you cannot see is a risk, and a fixed price means you carry it. Either add a contingency, quote the defined part fixed and the unknowns at your day rate, or write clearly what is excluded. The day rate vs fixed price guide covers when each makes sense.
Put the total next to what you know the local market charges. If you are well below, you are probably underpricing; if you are well above, check you have not double-counted. Then put it in writing — a quote sent from WhatsApp takes seconds and shows labour and materials as separate lines. The last step is the one that makes the next price better: track the actual hours and materials on the job, and compare them with what you quoted. That is how “busy but broke” gets fixed.
Add what you want to earn in a year before tax to your yearly business overheads, then divide by the hours you can realistically bill customers for, not the hours you work. For example, £50,000.00 divided by 1,380 billable hours is about £36.23 an hour, so you would round up to a rate such as £38.00.
On work you have done many times, little or none. On jobs with unknowns, such as old properties or hidden pipework and wiring, 15 to 25 per cent is a common buffer. The alternative is to quote the defined work at a fixed price and anything uncovered at your day rate, stated on the quote.
Travel is a real cost, so it needs to be covered somewhere. Many tradies build it into their hourly rate by dividing by billable hours only, and add a separate travel or parking line for jobs that are unusually far away or expensive to park at.
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