How to Price Your Work as a Tradesperson: A UK Guide

16 February 2026

Pricing is one of the hardest parts of running a trade business. Charge too much and you lose jobs to competitors. Charge too little and you're working long hours for not much reward. Most tradespeople learn pricing through experience — often after undercharging on a few jobs and realising the numbers don't add up.

This guide covers how to work out what you should be charging, what your overheads actually cost, and how to avoid the most common pricing mistakes.

The Pricing Formula

Every price you quote should cover four things:

• Labour — your time on the job
• Materials — what you need to buy for the job
• Overheads — the cost of running your business (van, insurance, tools, fuel, phone, etc.)
• Profit — what's left after everything else is paid

If your price only covers labour and materials, you're effectively working for free once you account for your overheads. This is the single most common pricing mistake in the trades.

Working Out Your Day Rate

Your day rate needs to cover more than just the hours you're on site. Here's how to calculate it properly:

Step 1: Work out your annual overheads. Add up everything your business costs you per year — van payments, fuel, insurance, tools, phone, accountant, training, marketing, workwear. For most sole trader tradespeople, this comes to roughly £8,000 to £16,000 per year.

Step 2: Work out your available working days. Start with 260 weekdays, subtract holidays (28 days minimum), bank holidays (8), sick days, and quiet periods. Most tradespeople realistically work around 220 days per year.

Step 3: Work out your daily overhead cost. Divide your annual overheads by your working days. For example, £12,000 in overheads across 220 days = roughly £55 per day just to keep your business running.

Step 4: Add your desired daily take-home pay. If you want to take home £150 per day after tax and overheads, you need to add enough to cover income tax and National Insurance on top. As a rough guide, add 25–30% for tax.

Step 5: Add it all up. Daily overhead (£55) + desired take-home (£150) + tax provision (~£45) = a minimum day rate of around £250. That's before materials.

What Other Tradespeople Are Charging

Knowing what others charge gives you a benchmark. These are average UK day rates for 2025/26, based on data from Checkatrade, HaMuch, and other trade platforms:

London rates are typically 15–30% higher than the national average, reflecting higher operating costs (fuel, parking, congestion charges, insurance). In Northern England and Wales, rates tend to be 10–20% lower than the national figures above.

These are averages. If you're experienced, well-reviewed, and specialised, you can charge at the higher end. If you're just starting out, you'll likely need to be more competitive while you build a reputation.

Fixed Price vs Day Rate: When to Use Each

Both approaches have their place:

• Fixed price works well for defined jobs where you can accurately estimate the time and materials. Customers prefer it because they know exactly what they'll pay. You benefit because if you finish early, you keep the difference.
• Day rate suits open-ended or uncertain work — stripping out a bathroom where you don't know what's behind the tiles, for example. It protects you when jobs run longer than expected, but customers can feel nervous about an open-ended bill.

As a general rule, quote fixed prices whenever you can. Customers prefer certainty, and it positions you as confident in your ability to estimate work accurately. Use day rates when the scope genuinely can't be defined upfront, and always give the customer a realistic estimate of how many days you expect.

How to Handle Materials

There are two common approaches to materials:

• You supply the materials. Buy at trade prices and add a markup of 10–20% to cover your time sourcing, collecting, and handling them. This is standard practice across the UK trades and most customers expect it.
• The customer supplies the materials. You provide a materials list, they buy everything, and you charge for labour only. This can work for simple jobs but often leads to wrong items, delays, and return trips.

Whichever approach you use, show materials as a separate line on your quote. It builds trust and lets the customer see exactly where their money is going.

Markup vs Margin: Know the Difference

This catches out a surprising number of tradespeople. Markup and margin sound similar but they're calculated differently, and confusing them means you'll either overcharge or — more commonly — undercharge.

• Markup is the percentage you add on top of your cost. If materials cost £500 and you add a 20% markup, you charge £600.
• Margin is the percentage of the selling price that is profit. In that same example, your £100 profit on a £600 sale is a margin of 16.7% — not 20%.

Here's a quick reference:

If you're aiming for a 20% profit margin on materials, you actually need a 25% markup. A small difference on one job, but it adds up across a year's worth of work.

What Your Overheads Actually Cost

Many tradespeople underestimate their overheads because they don't track them properly. Here's a realistic breakdown of annual running costs for a sole trader in 2025/26:

• Van (finance/lease + fuel + insurance + servicing + tax): £6,000 – £11,000
• Insurance (public liability + tools + professional indemnity): £300 – £900
• Tools and equipment: £500 – £2,000
• Accountant: £300 – £800
• Phone and data: £300 – £600
• Marketing (Checkatrade, website, etc.): £500 – £2,000
• Training and certifications: £200 – £1,000
• Workwear and PPE: £100 – £300
• Miscellaneous (parking, waste, admin): £300 – £1,000

Total: roughly £8,500 – £19,600 per year. London tradespeople can add £3,000–£6,000 for ULEZ charges, congestion zone fees, and higher parking costs.

The rule of thumb: out of every £250 day rate, roughly £55–£75 goes to overheads, £30–£50 goes to tax and National Insurance, and £125–£165 is your actual take-home pay. If your day rate doesn't cover your overheads with room for profit and tax, you need to adjust your prices.

Common Pricing Mistakes

• Pricing based on what others charge, not what you need. Your overheads, experience, and local market are unique. Use industry rates as a benchmark, not a target.
• Forgetting overheads. If you only factor in labour and materials, your profit is an illusion. Your van, insurance, and tools aren't free.
• Undercharging to win work. Competing on price alone is a race to the bottom. Customers who choose the cheapest quote are often the most difficult to work with. Compete on quality, reliability, and professionalism instead.
• Not accounting for non-billable time. You don't charge for quoting, invoicing, travelling between jobs, buying materials, or dealing with admin. These hours still cost you money. Your billable rate needs to cover your non-billable time too.
• Confusing markup and margin. As explained above, a 20% markup is not a 20% margin. Know which one you're using and calculate accordingly.
• No review. Your costs change every year — fuel, insurance, materials. If you haven't reviewed your rates in the last 12 months, you're probably undercharging.

Presenting Your Price

How you present your price matters almost as much as the price itself. A clear, professional quote with itemised line items builds trust and justifies your rates. A rough number sent by text message invites haggling and comparison shopping.

Break the job down into clear line items. Show labour and materials separately where possible. Include your payment terms and a validity period. When a customer can see exactly what they're paying for, they're far less likely to push back on price.

NippyAgent lets you turn your pricing into a professional PDF quote in under 60 seconds, directly from WhatsApp. Add your line items, and it generates a clean document with your business name, a unique quote number, payment terms, and a validity date — ready to send to your customer while you're still on site.