How to price a job as a tradesperson (without underselling yourself)

Pricing is where most tradespeople leave money on the table. Not because they are bad at their trade, but because nobody teaches you how to work out what you should actually charge. You pick a number that feels about right, match what the bloke down the road charges, and hope for the best.

That approach worked when fuel was £1.10 a litre and material costs were stable. It does not work now. Material costs have risen 8-12% year on year. Insurance premiums are up. Van running costs are up. If your prices have not moved in the last two years, you have effectively given yourself a pay cut.

This guide shows you how to calculate what you actually need to charge to run a profitable trade business, not just survive.

Current hourly rates by trade (2026)

These are the going rates across the UK outside London. They represent what established, competent tradespeople are charging for domestic work. If you are significantly below these numbers, you are undercharging.

London prices are 30-40% higher across the board. This is not greed. Parking alone can cost £15-30 per day. The congestion charge is £15. Van insurance is double what it costs in Leeds. Higher rates in London reflect genuinely higher operating costs.

These rates have risen 8-12% year on year since 2023. If you last reviewed your prices in 2024, you are already behind. Material costs have been even more volatile - copper pipe, timber, and electrical components have all seen sharp increases.

Calculating what you actually need to charge

Forget what the competition charges for a moment. Start with your own numbers. Here is the calculation most tradespeople never do but absolutely should.

Step 1: What do you want to earn?

Be honest. After tax, after expenses, after NI - what number do you want in your pocket at the end of the year? Let us say £45,000 take-home. That is a reasonable target for an experienced tradesperson outside London.

To take home £45,000 as a sole trader, you need pre-tax profits of roughly £57,000 (accounting for income tax and National Insurance). Use the tax table in our invoice generator to check the exact figure for your situation.

Step 2: Add your annual overheads

Using our example: £57,000 pre-tax income needed + £15,000 in overheads = £72,000 in revenue you need to generate from jobs per year.

Step 3: Work out your billable days

This is where the maths gets uncomfortable. You do not bill for 365 days, or even 260 weekdays.

202 days. That is it. Every day you spend quoting jobs you do not win, driving to merchants, doing paperwork, or waiting for deliveries is a day you are not billing.

£72,000 / 202 billable days = £356 per day minimum, or roughly £45 per hour on an 8-hour day.

And that is the bare minimum to hit a £45,000 take-home. No profit margin. No buffer for quiet months. No growth. For a comfortable, sustainable business, add 15-20% on top: £410-£430 per day, or £51-£54 per hour.

Fixed price vs time and materials

Two approaches, each with clear pros and cons:

Fixed price quoting

Best for: Clearly defined jobs where you can accurately estimate time and materials. Bathroom refits, kitchen installations, rewires, boiler replacements.

Advantage: The customer knows exactly what they are paying. No surprises. This wins jobs because homeowners hate open-ended costs. You can also build in a healthy margin because the customer is paying for certainty.

Risk: If the job takes longer than expected or you hit problems (rotten joists, hidden asbestos, outdated wiring that needs replacing), you absorb the cost. You either eat into your margin or have a difficult conversation about additional charges.

How to mitigate the risk: Quote with a 15-20% contingency built in. Include clear exclusion clauses in your quote: "This quote assumes standard wiring conditions. Any unforeseen issues such as asbestos removal or structural repairs will be quoted separately." Do a thorough survey before quoting. The more time you spend understanding the job upfront, the more accurate your quote.

Time and materials (day rate)

Best for: Jobs where the scope is unclear, repair work where you do not know what you will find until you start, and ongoing or phased projects.

Advantage: You get paid for every hour you work. No risk of underquoting. If problems emerge, you just keep working and billing.

Risk: Customers are nervous about open-ended costs. Some will ask for a cap or estimate, which partially defeats the purpose. You may also face disputes about how long something should have taken.

How to make it work: Give an honest estimate of how long you expect the job to take. Communicate daily or every few days on progress. Keep detailed time records. Bill weekly, not at the end - smaller, regular invoices are easier for customers to pay than one large bill.

How to handle materials pricing

You buy materials at trade prices. The customer pays retail. The difference is yours, and it is entirely legitimate. Here is how to think about it:

10-20% markup on materials is standard across all trades. This covers your time sourcing and collecting materials, your trade account costs, and the risk of waste or returns. Some tradespeople charge materials at cost and build the margin into their labour rate instead. Either approach is fine as long as your total price is right.

For expensive items (boilers, consumer units, bathroom suites), be transparent. Show the customer the product specification and your installed price. They can see the retail price online. A 15% markup on a £2,000 boiler is £300 - reasonable given you are collecting, handling, and guaranteeing the product. Trying to mark it up 50% will lose you the job.

For consumables (screws, fittings, tape, adhesive, filler), do not itemise. Bundle them into a "sundries" line on your quote, typically £30-£80 depending on the job. Nobody wants to see 47 line items for cable clips.

Handling the "how much?" conversation

The phone rings. "Hi, how much to tile a bathroom?" You have no idea. You have not seen the bathroom. You do not know the size, the condition of the walls, the tile size, whether there is a shower tray or a wet room, or what prep work is needed. But the customer wants a number.

Here is how to handle it without losing the lead or committing to a number you will regret:

"For a standard family bathroom, my customers typically pay between £800 and £1,500 for labour depending on the size and complexity. I would need to pop round and have a look to give you an accurate figure. When suits you?"

That answer does three things. It gives them a ballpark so they know you are in their budget range. It explains why you cannot give an exact price without seeing the job. And it moves towards a site visit, which is where you win the work.

Never quote a firm price over the phone for anything beyond a simple callout. The customer who insists on a phone price is often the customer who will complain about extras later. If they will not let you visit the site before quoting, that is a red flag.

When and how to raise your prices

If you have not raised your prices in the last 12 months, you are overdue. Material costs are up. Fuel is up. Insurance is up. The cost of living has increased. Your prices should reflect this.

For new customers, just quote at your new rate. No explanation needed. They have no reference point for your old prices.

For existing customers, a brief note does the job: "Just to let you know, my rates are going up by X% from [date] to reflect increased costs. I wanted to give you advance notice." Most customers expect annual price increases. The ones who push back hard on a 5-10% increase are probably not customers you want to keep.

Review your prices at least once a year. Tie it to a date - 1 April (the start of the tax year) is a natural trigger. Look at what your overheads have done over the previous 12 months, check that your hourly rate still gives you the take-home you need, and adjust accordingly.

VAT and your pricing

If you are VAT-registered (compulsory above £90,000 turnover), your pricing gets more complicated. Domestic customers pay the VAT-inclusive price, so a job you quote at £1,000 plus VAT costs them £1,200. That makes you 20% more expensive than a non-VAT-registered competitor quoting the same net price.

This is one of the genuine disadvantages of VAT registration for trades doing mainly domestic work. You either absorb some of the VAT hit by reducing your margins, or you accept that you will lose some price-sensitive customers. Commercial customers do not care because they reclaim the VAT.

Use our VAT calculator to quickly work out inclusive and exclusive prices. And if you are approaching the VAT threshold, talk to your accountant about the flat rate scheme - it can reduce the effective VAT you hand over to HMRC, depending on your trade category.

Frequently asked questions

Pricing is not guesswork. It is maths. Work out your costs, add a proper margin, review annually, and stop apologising for charging what you are worth. Every invoice you send should reflect the full value of your skills, experience, and reliability. Use InvoiceAdept to create professional invoices that match the quality of your work, and get paid faster with automated payment reminders and online payment links.