Pricing
How to price a job as a tradesperson (and know it made money)
In short: your rate has to cover your wage, your overheads and a profit, spread over the hours you can actually bill, not the hours you work. Add a markup on materials, and after each job compare what it really cost with what you charged. Most trades who feel busy but broke are underpricing the hours they can't bill, or never checking which jobs lost money.
Step 1: Add up your yearly overheads
Overheads are everything you pay to be in business, whether or not you're on a job. List a full year:
| Overhead | Example per year |
|---|---|
| Van: lease or finance, insurance, tax, servicing, fuel | £6,000 |
| Tools, kit and replacements | £1,200 |
| Public liability and other insurance | £600 |
| Phone, software and subscriptions | £1,200 |
| Accountant, bank charges, trade memberships | £1,000 |
| Advertising, website and listings | £700 |
| Total overheads | £10,700 |
Your numbers will differ. The point is to write them down rather than guess.
Step 2: Count the hours you can really bill
This is where most rates go wrong. A year has 52 weeks, but you won't bill all of them. Take off holidays, bank holidays, the odd sick day and quiet spells. Then take off the time each day you spend quoting, buying materials, driving between jobs and doing paperwork.
A realistic example: 46 working weeks × 5 days × 6 billable hours = 1,380 billable hours a year.
Step 3: Work out your hourly and day rate
Add the wage you want to your overheads, divide by your billable hours, then add a profit margin so the business itself makes money, not just you.
| Example | |
|---|---|
| Wage you want to pay yourself | £40,000 |
| Overheads | £10,700 |
| Total to cover | £50,700 |
| ÷ billable hours | 1,380 |
| Break-even rate | £36.74 an hour |
| + 10% profit | £40.41 an hour |
If you charge by the day, multiply by the hours you're actually on site: 6 hours × £40.41 ≈ £243 a day.
If you're VAT registered, these are prices before VAT.
Step 4: Mark up materials, and know markup from margin
Charging materials at cost means you're funding the job, collecting the materials and taking the risk on breakages for nothing. Most trades add a markup.
Markup and margin aren't the same thing:
| Markup on cost | Margin on the price |
|---|---|
| 10% | 9.1% |
| 20% | 16.7% |
| 25% | 20% |
| 50% | 33.3% |
So if you want a 20% margin on materials, you need a 25% markup. Margin = markup ÷ (1 + markup).
Step 5: Price the job, then check it afterwards
Here's a bathroom refit, quoted at £4,800 before VAT:
| Cost | Amount |
|---|---|
| Materials at cost | £1,650 |
| Labour: 2 people × 5 days × 8 hours at £22 an hour (wages plus employer costs) | £1,760 |
| Skip and waste disposal | £280 |
| Total cost | £3,690 |
| Profit | £1,110 (23% of the price) |
Now say the job ran two days over because of a rotten floor you hadn't allowed for. That's another 32 hours of labour, £704, and the profit drops to £406, or 8.5%. Nothing about the job looks different from the outside: same price, same happy customer. You only see it if you compare the hours actually logged with the price.
That's why job costing matters more than the rate itself. Record the hours against each job, record the materials, and look at the profit once it's done. After a dozen jobs you'll see which kinds of work pay and which quietly don't.
Common questions
What is a good hourly rate for a tradesperson in the UK?
It depends on your trade, area and overheads, so there's no single right number. Work it out from your own costs: (the wage you want + yearly overheads) ÷ billable hours, plus a profit margin. If the result is far above local going rates, look at your overheads and your billable hours before you cut your price.
Should I charge a day rate or a price for the job?
Homeowners usually prefer a fixed price for the whole job, because they know what they'll pay. A day rate suits open-ended work where you can't see the scope, such as repairs or maintenance. Build either one from the same hourly rate, so you know what each day has to earn.
How much should I mark up materials?
Many trades mark up materials by somewhere between 10% and 25%, but it's your choice. Remember that a 25% markup is a 20% margin. Whatever you choose, apply it consistently, and include the time spent collecting materials in your labour.
How do I know if a job made money?
Compare the price with the real cost: the hours everyone logged on the job multiplied by what those hours cost you, plus materials and any extras like skip hire. If you track time and materials against each job, you can see the profit on every job and spot the ones that overran.
What overheads do tradespeople forget?
The most common are van running costs beyond fuel, tool replacement, insurance, software, accountant's fees, and above all unbillable time: quoting, travelling, buying materials and admin. Those hours are real costs even though nobody pays you for them directly.
Where TradeDay fits
TradeDay records each person's hours and the materials against every job, so once a job is finished it shows the cost, the price and the profit side by side. You can see which jobs and which kinds of work actually make money, without a spreadsheet.