How to price a job is the single skill that decides whether your trade makes money or quietly bleeds it. Get the number right and you win the work and keep a profit; get it wrong and you either lose the job to a cheaper bid or, far worse, win it and work for free. This guide gives you the real formula the good operators use: materials, plus labour at your true loaded rate, plus overhead, plus a deliberate profit margin. No guessing, no gut feel, no copying the other guy's price.
By the end you will be able to sit down with any enquiry, repainting a flat, rewiring a kitchen, fitting a bathroom, and build a price from the ground up that covers every cost and pays you properly. We will work a full example in GBP and EUR so you can see exactly where the money goes, and we will name the mistakes that put hard-working tradespeople out of business.
Your cost is not your price
The first thing to burn into your brain: cost and price are two different numbers. Your cost is what the job takes out of your pocket, materials and your time. Your price is what the customer pays. The gap between them is your profit, and it does not appear by accident. If you only charge your cost, you have effectively given your labour and your business away for nothing.
Most tradespeople who go broke are not lazy or bad at the work. They are busy, fully booked, and still skint, because every job is priced at or below true cost. They confuse "money came in" with "I made money." A GBP 4,000 job that cost you GBP 4,200 to deliver lost you GBP 200, no matter how full your diary looked. Pricing is the discipline of making sure the gap is always positive and big enough to be worth it.
The formula that actually works
Every honest price is built from four blocks. Add them up and you have a number you can stand behind:
- Materials – everything you buy for the job, at what it actually costs you, plus a markup for sourcing, collecting, and carrying the risk on it.
- Labour – realistic hours multiplied by your true loaded hourly rate (not the rate you wish you charged, the rate that actually keeps the lights on).
- Overhead – your share of running the business: van, insurance, fuel, phone, tools, software, accountant. This exists whether or not you are on a job, so every job must carry a slice of it.
- Profit margin – a deliberate percentage on top, your reward for the risk and the reason to keep trading. This is not overhead and it is not your wage. It is profit.
Price = Materials + Labour + Overhead + Profit. Skip any block and the number is wrong. Most people remember materials and labour, forget overhead entirely, and never add a real margin. That is the recipe for being busy and broke.
Get your loaded hourly rate right first
The whole formula collapses if your hourly rate is a guess. Your loaded rate is what you must earn per billable hour to cover your wage, your overhead, and the simple fact that not every hour of your week is billable. If you want the full method, read our guide on how to set your hourly rate as a contractor, then bring that number back here. For this article, assume you have done the work and your true loaded rate is GBP 45 / EUR 52 per hour.
Step by step: how to price a job from scratch
Here is the process, in the order that stops you missing things. We will use one running example: repainting a two-bedroom flat, walls and ceilings, two coats, light prep.
Step 1: Scope the job in writing
Before any numbers, pin down exactly what is included: which rooms, how many coats, whether you are filling and sanding, who moves the furniture, who supplies the paint. A vague scope is how a profitable job turns into a loss, because every "oh, while you're here" is unpaid work you quietly absorbed. Write the scope down and price that, not a friendly hunch.
Step 2: Estimate the hours honestly
This is where most jobs are lost before they start. Be honest about how long the work really takes, including setup, masking, drying time between coats, cleanup, and the trip to the merchant. For our flat: prep and masking 6 hours, first coat 7 hours, second coat 6 hours, cutting in and detail 5 hours, cleanup and snagging 2 hours. That is 26 hours, not the "couple of days" you would have guessed.
If you have been tracking your time on past jobs, you do not have to guess at all. Pull up what a similar flat actually took last time and price from real history instead of optimism. Billr's one-tap time tracking builds exactly that record, so your next estimate is grounded in what the work genuinely takes you, not what you hope it takes.
Step 3: Price the materials
List every material and what it costs you, then add a markup. For the flat: paint and primer GBP 180 / EUR 208, sundries (rollers, tape, filler, sheets) GBP 60 / EUR 70. That is GBP 240 / EUR 278 at cost. Add a 20% materials markup (GBP 48 / EUR 56) for your time sourcing and the risk of waste, and materials come to GBP 288 / EUR 334.
Step 4: Cost the labour at your loaded rate
26 hours x GBP 45 = GBP 1,170. In euros, 26 x EUR 52 = EUR 1,352. Notice this already includes a slice of your overhead, because a properly loaded rate is built to. If your rate is bare-bones (just your target wage), add overhead separately in the next step instead of double-counting it.
Step 5: Add a deliberate profit margin
Now total the costs and add margin on top. Materials GBP 288 + labour GBP 1,170 = GBP 1,458. Add a 20% profit margin (GBP 291.60) and you get a price of GBP 1,750 (rounded). In euros: EUR 334 + EUR 1,352 = EUR 1,686, plus 20% (EUR 337) gives EUR 2,023, round to EUR 2,025. That margin is the difference between running a business and running a hobby that exhausts you.
Step 6: Adjust for reality
The base price is not always the final price. Adjust up for a difficult site (no parking, third floor, no lift), a messy or indecisive client, a tight deadline, or work that carries extra risk. Adjust only carefully for relationships or repeat work, and never out of fear. A nightmare client who haggles, changes their mind, and pays late should cost more, not less. Pricing in the pain is not greedy; it is survival.
Why gut-feel and competitor-matching go broke
Two pricing methods kill more trades than any recession.
Pricing on gut. "That feels like a GBP 1,200 job" is not a price, it is a wish. Gut feel systematically underprices, because the brain anchors on the materials it can see and forgets the hours, the overhead, and the margin it cannot. Do that across a year of jobs and you will have worked hundreds of unpaid hours without ever noticing where the money went.
Matching the competitor. When you hear the customer got a quote for GBP 1,400 and you drop your GBP 1,750 to match it, you are pricing your business on a number from a business you know nothing about. Maybe they cut corners, maybe they are about to go under, maybe they made the exact mistake you are about to copy. Their price is not data about your costs. Price your job, then decide if you want it at your number, not theirs.
The most common pricing mistakes
- Forgetting overhead. The van, the insurance, the unpaid hours quoting and driving, none of it is free, and if no job carries it, you carry it personally.
- Underestimating hours. The most expensive mistake of all. Two hours under per job, across two hundred jobs a year, is weeks of free labour.
- No real margin. Covering costs is not a business, it is breaking even with extra steps. Margin is what funds new tools, slow weeks, and your eventual pension.
- Not adjusting for difficult clients or sites. The same job is not the same price when the client is a nightmare and the site is a logistics puzzle.
- Forgetting tax. The price the customer pays is not all yours. Set aside for income tax and VAT from the start so the number you keep is the number you planned.
- Rounding the wrong way. Always round up to a clean number, never down. Rounding GBP 1,758 to GBP 1,750 is fine; rounding it to GBP 1,700 just gave away GBP 58.
From the right number to a paid invoice
Working out the price is the hard part. Turning the agreed job into a clean, professional bill should be the easy part. Once the customer says yes to your number, Billr helps you keep the whole job honest. Set the project up with a budget and track your hours against it, so you can see in real time whether the actual work is staying inside the price you quoted, or quietly eating your margin. If it starts to overrun, you know before it is too late.
For the prices and rates you use again and again, build a reusable service-item catalog: a day rate, a standard callout, a per-room painting price, each saved once with its set price so you are not re-deriving numbers on every job. When the work is done, your tracked hours and saved items become a tidy, branded invoice in a couple of taps, ready to send and get paid online. The skill of pricing lives in your head and on paper; Billr makes sure the right number actually reaches the customer and turns into money.
FAQ
What is the difference between cost and price?
Cost is what the job takes out of your pocket: materials plus your time. Price is what you charge the customer. The gap between them is your profit. If you only charge your cost, you are working for free and funding the customer's project out of your own business.
What profit margin should a tradesperson aim for?
A common target is 15% to 25% net profit on top of all true costs, including a properly loaded labour rate. The right figure depends on your trade, risk, and market, but it must be a deliberate number you add on purpose, never whatever happens to be left over at the end.
How do I estimate hours accurately?
Price from history, not hope. Track how long real jobs actually take, then use that record to estimate the next similar job. Include the parts people forget: setup, travel, drying or curing time, cleanup, and snagging. If you have no history yet, estimate, then track the real job and correct your numbers for next time.
Should I match a competitor's quote?
No. Their number tells you nothing about your costs, your overhead, or whether they are even pricing correctly. Build your own price from the formula, then decide whether you want the job at that price. Competing on someone else's number is how you inherit someone else's mistakes.
Do I include tax in the price?
Quote your price excluding tax, then add VAT or sales tax on top where it applies, and always set aside for income tax from what you keep. The figure the customer pays is not all yours, so plan the tax in from the start rather than getting a shock at the end of the year.
Key takeaways
- Cost and price are different numbers; the deliberate gap between them is your profit.
- Price every job as Materials + Labour (real hours x true loaded rate) + Overhead + a deliberate margin.
- Estimate hours from tracked history, not optimism, and never forget overhead or margin.
- Never price on gut feel or by matching a competitor's number; build your own number from your own costs.
- Adjust up for difficult clients, awkward sites, and tight deadlines, and always round up.
- Billr does not write the quote for you, but it sharpens your inputs: your real hourly rate, tracked hours for honest estimates, project budgets to protect your margin, and a service-item catalog of set prices.
Price the next job properly and you will feel the difference in your bank balance, not just your diary. Work out the number with the formula, protect your margin while you deliver, then let Billr turn the agreed work into a professional invoice and get you paid. See how project budgets and time tracking keep every job profitable, and stop being busy and broke.