Most tradespeople undercharge — not because they don't know their trade, but because pricing is never taught on the tools. This guide walks you through every number you need to set a price that covers your costs, pays you properly, and still wins the job.
1. Start with your real hourly cost
Your charge-out rate is not the same as your take-home rate. Before you set a day rate, add up everything it costs to run your business for a year:
- Van insurance + fuel + servicing
- Public liability insurance
- Tools — purchase, repair, and replacement
- Phone, PPE, work clothing
- Accountant or bookkeeping software
- Unpaid time: quoting, admin, travel between jobs
Divide the total by your realistic billable days (typically 200–220 days per year after holidays, sick days, and non-chargeable time). That gives you your minimum day rate just to break even — before profit.
2026 benchmark hourly rates (UK, self-employed)
Carpenter
£35–£50/hr
Roofer
£35–£55/hr
Mason/Bricklayer
£30–£50/hr
Painter & Decorator
£25–£40/hr
General Builder
£30–£50/hr
London and South East rates typically run 15–25% higher. Specialist work (heritage, structural) commands a premium.
2. Estimate labour hours accurately
The most common pricing mistake is underestimating the time. For every job, break the work down into tasks rather than guessing a round number. Ask yourself:
- How long to prep and clear up — never forget this
- How long for the actual work, broken into stages
- Any second visits for drying time, inspections, or snagging
- Travel to the merchant or skip hire
Once you have a total, add a 10–15% contingency for every job unless you've done identical work on an identical property before. Access problems, hidden damage, and awkward customers all eat into your hours.
3. Price materials — and add a markup
Always supply materials yourself if you can. This gives you two advantages: you earn a margin on the supply, and you control quality.
The standard materials markup for self-employed trades is 15–25% on top of your trade-account buy price. This is not profiteering — it covers your time sourcing and delivering materials, the risk of ordering too little or too much, and the cost of waste and breakages.
Always get a firm materials quote from your merchant before pricing, not a remembered estimate. Timber, tiles, and insulation prices move sharply — using last month's price on today's job is a silent margin killer.
4. Factor in margin, not just markup
Markup and margin are not the same thing, and confusing them is expensive. If you buy materials for £500 and add a 20% markup, you charge £600 — but your margin is only 16.7%, because £100 out of £600 is your gain, not £100 out of £500.
For a healthy business, aim for a net margin of 15–25% on the total job price after all costs. If you're consistently below 10%, you're working hard for very little and any unexpected cost will put you in the red.
The simplest formula: Job Price = (Labour + Materials) ÷ (1 – desired margin). For a 20% net margin: divide your total cost by 0.80.
5. VAT — know where you stand
In the UK, you must register for VAT once your taxable turnover exceeds £90,000 in a 12-month rolling period (2026 threshold). If you're not registered, do not add VAT to your quotes.
If you are VAT-registered:
- Domestic construction work (new builds and conversions): typically 0% or 5% reduced rate
- Repairs, maintenance, and improvements to existing homes: standard rate 20%
- Always show VAT separately on your quote so the customer sees the net price
If you're close to the threshold, plan ahead. Registering voluntarily can work in your favour if your customers are businesses that can reclaim VAT. Talk to an accountant before you hit the limit.
6. Common pricing mistakes to avoid
Pricing from memory
Relying on what you charged last year ignores material price changes, wage inflation, and the specific complexity of this job. Price each job fresh.
Not charging for small jobs properly
A two-hour call-out still needs travel time, fuel, and administration. Small jobs often have the worst margin if you treat them like off-cuts of a big job.
Discounting to win the job
Cutting your price to undercut a competitor trains customers to shop on price alone. If your quality is higher, price accordingly and explain why.
Forgetting the snagging and guarantee time
Every job carries a tail — return visits, snags, and warranty calls are unpaid unless you've accounted for them. Build a small allowance in.
Not putting a quote expiry on it
Material prices move. A quote without an expiry date can lock you into a price you gave six months ago when timber was cheaper. Set a 30-day expiry as standard.
7. Structuring the quote document
A professional quote does more than list a price — it protects you legally and builds trust with the customer. Every quote should include:
- Scope of work — exactly what you will and won't do
- Materials — specification, brand, and quantity (or a clear allowance)
- Labour — shown separately from materials
- Exclusions — what is not included, e.g. making good, skip hire, specialist surveys
- Payment terms — deposit required, stage payments, or payment on completion
- Start date and duration — approximate, with caveats
- Quote expiry — 30 days from issue as standard
- VAT — clearly stated if applicable
The short version
- Work out your real overhead cost per day, not just your wage.
- Estimate hours by task, not intuition — then add 10–15% contingency.
- Price materials fresh, using current merchant quotes with a 15–25% markup.
- Target a 15–25% net margin on the total job price.
- Know your VAT position before you send anything out.
- Always set a 30-day quote expiry and itemise exclusions.