How much should you charge? Day rates and pricing for UK trades

Price too low and you work yourself into the ground for nothing. Price too high for your area and the phone stops ringing. Working out what to charge is one of the most important skills in a trade business, and it is a calculation, not a guess. Here is how to set a day rate you can actually live on.

Start from what you need to earn, not what the next person charges

The common mistake is to copy the rate of whoever you last spoke to. Instead, build your rate from your own numbers. Work out the annual income you want to take home, add your business costs for the year (van, tools, insurance, fuel, phone, software), and remember the tax you will owe on top. Then divide by the number of days you can realistically bill.

That last number catches people out. There are around 250 working days in a year, but you will not bill all of them once you take off holidays, illness, quoting, buying materials, chasing payments and quiet spells. Many sole traders bill far fewer days than they expect, so be honest about it, because your rate has to cover the unbilled days too.

A simple worked example

Say you want to take home £35,000, your business costs for the year come to £12,000, and you set aside a share for tax. If you can bill around 200 days in the year, you can see roughly what your day needs to earn once all of that is added up and divided out. Run the sum with your own figures rather than these, but do run it, because a rate built this way is one you can defend and sustain.

Day rate or fixed price?

A day rate is simple and works well for open-ended or hard-to-predict work, where the customer is really paying for your time. A fixed price, quoted for the whole job, suits well-defined work and is usually what customers prefer because they know the total up front. Fixed pricing can earn you more when you are quick and efficient, but only if you have priced the job properly, so it rewards accurate quoting. Our guide on how to price a job and make a profit covers that side in detail.

Do not forget tax and expenses

Whatever you charge, part of it is never really yours. Set aside a share of every payment for your tax bill so January is not a shock, and claim every allowable business expense you are entitled to, because that lowers the profit you pay tax on and effectively lifts what you keep from each day.

Review it regularly

Costs rise, your skills grow, and a rate you set three years ago is probably too low today. Look at your pricing at least once a year, and do not be afraid to raise it for new customers first if you are nervous. If you are turning work away, that is the clearest sign your rate is too low, not too high.

Related guides

• How to price a job and make a profit

• What expenses can self-employed tradespeople claim?

• How much should you set aside for tax as a sole trader?

Quoting accurately, tracking your costs and knowing your numbers is what makes a sustainable rate possible, and it is exactly what TradePilot is being built to give UK trades. Join the waiting list and we will let you know the moment it launches.