To price your trades services for maximum profit, you need to know your real minimum day rate, apply a proper markup on materials, and stop pricing to win — and start pricing to earn. Most tradespeople who struggle with money aren’t bad at their trade. They were never taught the numbers.
They look at what a job takes, guess what sounds fair, and quote it. Sometimes they win. Sometimes they don’t. But rarely do they know whether they made a profit once materials, travel, overheads, and time chasing invoices are accounted for. Here’s how to fix that.
Why Most Tradespeople Are Underpaying Themselves
The most common pricing mistake in the trades is setting your rate based on what you think the market will accept — not what you actually need to earn.
Say you’re an electrician charging £200 a day. That sounds reasonable until you work through the numbers.
If you work 220 days a year (allowing for holidays, bank holidays, training days, and the odd sick day), that’s £44,000 in turnover. Before you’ve paid for a van, insurance, tools, certifications, accounting, and public liability cover. Strip those out and you might be netting £28,000–£32,000 — less than someone on PAYE doing the same work, with none of the job security.
The skills shortage is real. There are over 370,000 registered construction and trades businesses in Great Britain, but qualified, experienced tradespeople remain in short supply (ONS, 2024). You are not easy to replace. Your pricing should reflect that.
How to Calculate Your Real Minimum Day Rate
Before you quote a single job, you need to know your floor — the minimum day rate at which you break even and start paying yourself properly.
Here’s a straightforward method:
Step 1 — List your annual business costs:
- Van (purchase/lease, fuel, servicing, tyres): £6,000–£10,000
- Insurance (public liability, van, tools, income protection): £1,500–£3,000
- Tools and equipment (replacement, calibration, safety gear): £1,000–£2,500
- Certification and training (Gas Safe, NICEIC, Part P, courses): £500–£1,500
- Accounting, software, and admin: £500–£1,000
- Phone, marketing, and miscellaneous: £500–£1,500
Step 2 — Add them up. For a typical sole trader, total annual overheads run to £10,000–£19,500 before you’ve paid yourself a penny.
Step 3 — Work out your billable days. If you work 220 days per year but 30 are spent quoting, travelling between sites, doing admin, or waiting on materials, you have roughly 190 days where you’re actually on-site and billing.
Step 4 — Set your target take-home and divide. If you want to take home £50,000 a year, and your overheads are £15,000:
(£50,000 + £15,000) ÷ 190 billable days = £342 per day minimum
Most tradespeople are charging significantly below this. Not because they’re lazy — because nobody showed them the maths.
What Should You Charge for Materials?
Materials are not a cost you absorb. They are revenue.
Every time you pass materials to a customer at cost price, you’re working for free on the time spent sourcing them, driving to the merchant, loading and unloading, and managing the invoice. That time has a real value.
Standard practice across UK trades is to mark up materials at 20–30% above your merchant price. This is standard, it’s expected, and it’s how professional tradespeople run sustainable businesses.
Example: A plumber fitting a new bathroom in Luton prices up materials at £650 from the merchant. With a 25% markup, the customer is charged £812. The extra £162 covers approximately 45 minutes of sourcing time and contributes to margin. The customer gets a quality job with properly sourced parts. Everyone wins.
Some tradespeople worry customers will check prices online and challenge the markup. A few might — but if you’re doing quality work and the overall job is fairly priced, most customers won’t quibble over a few pounds on materials. And if they do, that tells you something useful about whether they’re a customer worth having.
Fixed Price vs Day Rate: Which Works Best?
Both models have their place. Choosing the wrong one costs you money.
Use a day rate when:
- The scope of work is genuinely unclear upfront (drainage investigations, fault-finding, older properties)
- The job could extend depending on what you find (loft conversions, rewires in older buildings)
- You’re on a larger commercial project where day rates are the accepted norm
- You’re working with a repeat customer you trust not to string the day out
Use a fixed price when:
- The job is clearly defined — boiler swap, bathroom fit, consumer unit replacement
- You’re competing against other quotes and want to make comparison easy
- You’re confident you can complete the work efficiently and pocket the time saved
The risk with day rates is customers watching the clock. The risk with fixed prices is underestimating the scope and ending up below your minimum day rate.
The simple fix for fixed-price jobs: Always include a written clause stating that any work beyond the agreed scope will be charged at your day rate. Send this in your quote before you start, not after a problem emerges on site.
How to Raise Your Prices Without Losing Good Customers
If you haven’t raised your rates in the last 18 months, you’ve effectively taken a pay cut. The all-construction Output Price Index rose by 3.4% in the year to December 2024 (ONS). Materials have climbed steadily since 2022. If your rates haven’t moved, your margin has quietly shrunk.
Here’s how to raise prices without making it awkward:
- Give notice, not an apology. A short message to existing customers before you start a new job: “From [date], my rates are moving to £X per day to reflect rising running costs and materials.” One sentence. No grovelling.
- New customers always get the new rate. Don’t hold yourself to old pricing for someone who’s never worked with you before.
- A price increase filters out difficult customers. The ones who push back hardest on price are rarely your best customers. If they leave, that’s often a net positive.
- Frame it around quality, not cost. “My rates reflect the standard of work and the fact that I back everything I do” lands better than “sorry, everything’s gone up.”
Real-world example: A heating engineer based in Hertfordshire raised his call-out fee from £75 to £95 and his day rate from £220 to £280 in 2024. He lost two regular customers. His annual turnover increased by over £14,000 because he was completing broadly the same number of jobs at significantly better margin.
What to Do When a Customer Says You’re Too Expensive
It happens. Here’s how to handle it without caving.
First: do not panic-discount. The moment you drop your rate without changing the scope, you’ve told the customer your first price was dishonest. That undermines trust before the job’s even started.
Three things to try instead:
- Ask what they’re comparing you to. “Have you had other quotes?” If yes, find out what’s included. Cheaper quotes often exclude Part P certification, a full warranty, or proper site protection. Point that out — calmly and specifically.
- Reduce the scope, not your rate. “I can do X and Y at that price, but Z would need to come out.” Your day rate stays intact. Their budget is met. The scope just adjusts.
- Let the job go. Not every job is worth taking. A rushed job at a slashed rate, for a customer who begrudged every pound, will drain you and leave nothing to show for the day. Sometimes walking away is the right business decision.
The tradespeople who earn the most are rarely the cheapest in their area. They’re the ones who’ve worked out exactly what they need to earn, stopped apologising for it, and built a reputation where the price conversation gets shorter every year.
For more on growing your trades business beyond pricing, read How to Get More Leads for Your UK Trades Business and How to Stop Working on the Tools and Work on the Business.
Need Help Growing Your Trades Business?
We Are SMC works exclusively with trades and construction businesses across the UK. We handle your Google Ads, SEO, social media and content so you can focus on the work. Get a free 30-minute strategy call at wearesmc.co.uk/get-started — no hard sell, just honest advice.
