Start a job price with the full cost of delivering the agreed work, then add the profit the business needs. Include the time around the work as well as the hours on the tools. A quote can cover the materials and still leave too little for collecting them, disposing of waste or running the van.

Use your own figures. Another tradesperson's price does not tell you their costs, their scope or whether that job made them any money.

Build the cost in a repeatable order

Work through the job from arrival to completion:

• Labour: preparation, installation, testing, clearing away and other time the job requires.

• Materials: current supplier prices, quantities, fixings, consumables, delivery and realistic waste.

• Other direct costs: plant hire, parking, permits, disposal and subcontractors.

• Business costs: the contribution needed towards insurance, tools, transport, accountancy and time you cannot charge separately.

• Unknowns: matters that need inspecting, confirming or explaining in the quote.

Your labour rate may already cover business costs and non-chargeable time. If it does, do not add the same allowance twice. The day-rate guide explains how to work from the year's costs and the days available to earn them.

Separate an unknown from a forgotten cost

A skip you will definitely need belongs in the calculation. Hidden damage that cannot be assessed yet needs a clear assumption, further investigation or an agreed method for pricing it if found.

Do not bury an arbitrary extra amount in the price and expect it to settle every possible change. Explain the limit of the work. If access, specification or customer-supplied items are uncertain, resolve them before promising a firm price where possible.

Know whether you mean markup or margin

Markup is measured against cost. Margin is measured against the selling price. Confusing them changes the amount left over.

Illustrative comparison: a £1,000 cost with 20% markup gives a £1,200 price. The £200 difference is 16.7% of that price. To produce a 20% margin on the same £1,000 cost, divide by 0.8: the price is £1,250 and the difference is £250.

These percentages are examples, not recommended trade rates or profit targets. Choose a target that makes sense for your actual costs, risk and market, then check the arithmetic.

Test the calculation on one job

This fictional example excludes VAT. Its labour allowance does not already contain the separately shown overhead contribution.

• Labour, including preparation and clearing away: £900.

• Materials and consumables: £620.

• Waste and parking: £130.

• Overhead contribution: £150.

• Total estimated cost: £1,800.

If this business chooses a 20% margin, £1,800 divided by 0.8 gives a selling price of £2,250. Expected profit is £450 before tax. The calculation does not guarantee that outcome: another day's work or an unpriced delivery reduces it.

Stress-test the figure before sending. What happens if one item is dearer, access takes longer or the work needs a return visit? Improve the estimate or clarify the scope where the answer exposes a gap.

Turn the cost into a clear customer price

The customer needs the work, total price, assumptions, exclusions and payment terms. They do not need every internal cost calculation. Keep that calculation in your own record so you can review it later.

For domestic customers, make unavoidable charges clear within the total, including VAT where applicable. If a charge cannot reasonably be calculated in advance, explain how it will be worked out. See the CMA's price-transparency guidance and the quote checklist.

Agree changed work and its price before carrying it out. A margin planned on the original job will not cover unlimited additions.

Check what the finished job actually earned

Compare estimated time and costs with the finished job. Note what differed and update your saved prices or allowances where appropriate. Repeated return visits, delivery charges or small consumables become visible when you check them consistently.

Keep profit and cash separate. An unpaid invoice is not money available to spend; money received may still have to cover tax and bills. Also distinguish your costing method from HMRC's rules for allowable expenses. Business planning and tax treatment answer different questions.

Written by Chris, founder of TradePilot.

This is general business information, not personal financial or tax advice. Examples are illustrative. Calculations and linked guidance checked on 16 September 2026.