Pricing jobs for profit: the tradesperson’s margin guide

The single biggest reason good tradespeople go bust isn’t bad work — it’s bad pricing. Undercharging feels like customer service. It’s not. It’s slow financial suicide.

The three components

Every job has three cost lines:

1. Materials — what you physically buy for the job
2. Labour — your time (and any subbies)
3. Overhead share — your portion of the fixed costs of running the business

Most tradespeople price 1 and 2 and forget 3. That’s where the profit disappears.

Working out your real hourly rate

Start with what you want to take home per year after tax, say £40,000.

Now add everything that has to be paid before you see that money:

• Income tax and NI: ~£10,000 on £60k self-employment profit
• Van costs: £4,000 (fuel, insurance, tax, repairs, depreciation)
• Tools and replacements: £2,000
• Public liability insurance: £250
• Trade association fees (Gas Safe, NICEIC): £200
• Accountant: £500
• Phone, internet, Holdfort subscription: £500
• Training and CPD: £500
• Marketing (van signage, Google, Facebook): £1,000

Your gross turnover target: £58,950 just to take home £40k.

If you bill 6 hours of labour per working day × 220 working days (allowing for holidays, illness, quote visits, admin) = 1,320 billable hours/year.

Real minimum hourly rate: £44.66.

Round up to £50 for a cushion. Less than that, you’re losing money — you just don’t know yet.

Pricing materials

You pay trade price, the customer pays retail. The gap is your materials markup, typically 10–20% on your cost.

Example: Worcester Bosch boiler, trade price £900. Retail markup of 15% = £1,035 on the invoice. Customer can’t reasonably complain — they’d pay more at B&Q — and the £135 covers your time sourcing, collecting, storing, transporting and warrantying the part.

Don’t hide markup. Itemise: "Boiler: £1,035 (incl. sourcing)". Transparency beats getting caught pretending.

Pricing labour

Multiply estimated hours by your real hourly rate. Then:

• Add a buffer. 15–20% for the unknowns that always appear.
• Round up, never down. £475 becomes £500.
• Quote fixed prices, not hourly. "8 hours at £50 = £400" gets argued. "£500 for the job" doesn’t.

A worked example: bathroom refit

• Materials: suite £1,200 + tiles £400 + plumbing bits £350 = £1,950. With 15% markup: £2,242.
• Labour: 40 hours × £50 = £2,000. Add 20% buffer: £2,400.
• Removal/disposal: £150.
• Round up: £4,800.

That’s not expensive. It’s what a bathroom refit properly priced actually costs.

Saying the number with confidence

The moment that kills tradespeople: the customer winces, and you say "well, I could do it for £4,200." Don’t. Say the number once. Shut up. Wait. If they can’t afford it, that’s fine — you’ll find another job at the proper price.

What Holdfort does

Holdfort doesn’t set your prices, but it stops you from losing track of what you’ve earned. Every invoice, every paid-vs-outstanding, every tax summary — in WhatsApp, automatic. See how →

A full quote template — copy and adjust

A proper tradesperson quote has these sections. You can draft this template once and re-use it for every quote.

Quote: [Job description]
Customer: [Name + address]
Issued: [Date] | Valid until: [Date + 30 days]
Quote reference: Q-[sequential number]

Scope of work (what’s included)
• Item 1 detail
• Item 2 detail
• Item 3 detail

Not included
• Decorating / making-good after works
• Disposal beyond one small skip
• Structural alterations beyond those specified

Labour: £X,XXX (X days at £XXX/day)
Materials (15% sourcing mark-up): £X,XXX
Disposal / skip: £XXX
Subtotal: £X,XXX
VAT (20% if registered): £X,XXX
TOTAL: £X,XXX

Payment schedule
• Deposit on acceptance: 20%
• Stage 1 (at [milestone]): 30%
• Stage 2 (at [milestone]): 30%
• Final on completion: 20%

Timeline: [estimated days], starting [date]. Weather/access delays may extend.
Guarantee: 12 months on labour, manufacturer warranties on parts.
Variations: any changes to scope will be priced separately and signed off before work continues.

Hourly vs day rate — which to quote

Most trades should switch to fixed-price quotes rather than day/hourly rates for planned work. Reasons:

• Customer anxiety. An hourly rate means the customer watches the clock. A fixed price means they focus on the outcome, not your pace. You get paid for efficiency; they get predictability.
• You capture efficiency gains. If you’ve done 50 bathroom refits, the 51st takes you a day less than the first — but you still bill the same. Hourly rates throw this away.
• Disputes disappear. "You took 6 hours, not 5" arguments stop. You either did the job for the agreed price, or you didn’t.

Keep hourly/day rates for: emergency callouts, "we don’t know how bad it is until we open it up" jobs, and T&M (time and materials) sessions for ongoing maintenance clients.

The real overhead — what to build into every price

Beyond the big-six overheads (van, insurance, tools, subscriptions, marketing, accountant) that we covered earlier, quietly factor in:

• Dead time between jobs: quoting visits, travel time, materials collection. Assume 25-30% of your working hours aren’t directly billable.
• Sick and holiday days: 4 weeks off + 10 sick days = 6 weeks you’re not earning. That’s 12% of the year.
• Admin: invoicing, chasing, record-keeping, tax filing — call it 5 hours a week if you don’t use Holdfort, 1 hour a week if you do.

When you work through the math, a £50/hour rate isn’t really £50/hour. It’s more like £3 0/hour once you factor in unbillable time. That’s why so many tradespeople who think they’re earning £100,000 gross end up with £30,000 in the bank at year-end — the overheads and unbillable time eat the rest.