How to Price a Job: Materials, Labour and Markup Explained
Pricing is where most trade businesses either make their money or quietly lose it. The arithmetic is simple enough: materials, plus labour, plus a margin that keeps the business alive. The skill is in how honestly you count each part. Undercount and you work for nothing; pad it blindly and you lose jobs you should have won.
Separate materials from labour, always
Cost the materials and cost your time as two distinct exercises, even if the customer only ever sees a single figure. Materials are measurable: get real prices from your merchant for the actual job, not last year's numbers from memory. Labour is your rate multiplied by an honest estimate of the hours, including the parts people forget: setting up, protecting floors, tidying at the end, and the drive time between jobs that eats a day faster than any saw does.
Why materials carry a markup
Passing materials through at cost is a slow leak. Every job's materials cost you more than the ticket price: the trips to the merchant, the offcuts and wastage that no job avoids, the breakage, the returns you never quite get round to, and your own money tied up in stock sitting in the van until the job starts. A markup on materials is how the trade covers those realities, and ranges spoken about commonly run from a modest percentage on big-ticket items up to considerably more on small sundries, where handling them costs nearly as much as buying them. The exact figure is yours to set; the mistake is setting none at all.
Build in a contingency for the unknowns
Some jobs hide surprises: the joist ends that turn out to be rotten, the pipework that is nowhere near where it should be, the wall that is not plumb. If the job type carries that kind of risk, price for it. You can add a small contingency line, or hold the risk inside your labour figure, but do it deliberately. The alternative is the mid-job phone call asking for more money, which customers hate and which you will sometimes lose. Where the unknowns are genuinely large, consider an estimate with stated assumptions instead of a fixed quote.
Day rate or fixed price?
Day rate suits work where the scope cannot honestly be fixed in advance: investigative repairs, fault-finding, making good after someone else's mess. The customer pays for your time, and the risk of surprises sits with them. Fixed price suits defined jobs, and it is what most domestic customers prefer because they know the total before you start. The catch is that the risk moves to you: underestimate the hours and the difference comes out of your pocket. Experienced tradespeople pick per job, and the deciding question is always the same: how confident am I in the scope?
Check the price before you send it
Run one last sanity check: does this price, across a typical month, cover your van, insurance, tools, holidays and quiet weeks, and still leave a wage worth having? Pricing is not just about winning this job. It is about whether the business works at all.
Put it into a quote, free
Once you know your materials, labour and margin, the quote generator lays it out as a professional document, works out the totals and saves it as a PDF.
Open the quote generatorPricing FAQs
Should I show my materials markup to the customer?
That is your call. Many tradespeople quote materials at the price they charge, without separating cost from markup, and that is normal practice. What matters is that your figure covers the merchant trips, the wastage and the money you have tied up in stock, not whether the customer can see the arithmetic.
How much contingency should I build into a price?
Enough to cover the unknowns that are likely on that type of job. A like-for-like swap needs little or none; opening up old structures or working around existing services needs more. Some tradespeople add a percentage line, others price the risk into their labour figure. Either way, do it deliberately rather than hoping.
Is day rate or fixed price better?
Neither, in general. Day rate suits work where the scope genuinely cannot be fixed in advance, like investigative repairs. Fixed price suits defined jobs and is what most domestic customers prefer, because they know the total before you start. Many tradespeople use both, choosing per job.
Should I charge for the time spent collecting materials?
Yes, one way or another. Trips to the merchant are working time on that customer's job. Most tradespeople recover it through the materials markup rather than as a visible line, which keeps the quote tidy while still covering the cost.