Guide

How to price a building job so it still makes money

Last reviewed 12 September 2026

Most trades lose money on the pricing, not on the job. Here is the order the numbers have to go in, and the two steps that get skipped.

There is a difference between a price that wins the job and a price that pays you for doing it. The trades who stay in business hit both, and they do it by building the number in the same order every time rather than starting from what they think the customer will accept.

Build the price from the bottom, never from the top

A price built downwards from a guess ("it feels like a four grand job") is a bet. A price built upwards from the work is a calculation you can defend, adjust and repeat. The order is always the same: labour, materials, plant and access, subcontractors, overhead recovery, risk, then margin.

Margin goes on last for a reason. If you fold it into your hourly rate early, you cannot see it, and the first thing a customer squeezes takes it away without anybody noticing.

1. Measure the labour in hours, not in days

Days hide waste. A job you call "two days" is really eleven working hours plus two hours of setting up and clearing away, and the two hours are the ones that never get charged. Break the task down into its real operations and put an hour figure on each: strip out, prepare, first fix, second fix, make good, clean and clear.

Add the parts of the day that are not the task itself. Travel to site and back. Loading and unloading. Collecting materials. Waiting for another trade to get off your area. On small domestic work these routinely add 20 to 30 per cent to the hours, and they are the single most common reason a job that priced well runs at a loss.

2. Price materials at what you will actually pay, on the day

Merchant prices move. Quoting from a price you remember from a job in the spring is how a kitchen refit loses a few hundred pounds of margin quietly. Get a live figure for anything that makes up a serious share of the cost, and put a validity period on your quote so a price that moves is not your problem.

Then add waste. Every material has a real waste rate, and pretending it is zero means paying for the difference yourself. Sensible working allowances are 5 per cent on straightforward boards and timber, 10 per cent on tiles in a plain room, and 15 per cent or more on tiles laid diagonally or in a room with a lot of cuts. Add delivery, and add the cost of collecting anything you have to fetch yourself.

3. Add the overheads that exist whether you work or not

This is the step most sole traders skip, and it is the expensive one. Your van, its insurance, fuel, public liability cover, tools and replacements, phone, accountant, software, workwear and training all cost money in a year when you are on site and in a week when you are not. They have to come out of the jobs you do price.

The arithmetic is simple. Total your annual fixed costs, then divide by the hours you genuinely expect to charge for in a year. That figure is what every chargeable hour has to carry before you have earned anything at all. Our guide to working out your true hourly rate does that sum in full.

4. Price the risk you can see

Some jobs carry a known unknown: a floor that might be rotten under the covering, a wall that might not be load bearing, a drain run nobody has seen. You have three honest options and one dishonest one.

Exclude it, and say so in writing on the quote.
Price it as a provisional sum with a stated basis, so everybody knows the figure is a placeholder.
Investigate first as a small paid item, then price the real work.
The dishonest option is to absorb it silently and hope. That is not a risk allowance, it is a donation.

5. Add margin, and make it a decision

Margin is not the same as your wage. Your wage is in the labour rate. Margin is what the business makes for carrying the job, the risk and the guarantee, and it is what pays for the quotes you write and lose.

Be clear about the difference between mark-up and margin, because mixing them up costs real money. Mark-up is added to your cost. Margin is a share of the final price. A 20 per cent mark-up on a cost of 1,000 pounds gives a price of 1,200 pounds, and that is a margin of 16.7 per cent, not 20. To make a true 20 per cent margin on that cost you have to charge 1,250 pounds.

A worked example

A bathroom refit, priced properly:

Labour: 46 hours on the task, plus 8 hours of travel, collection and clearing, so 54 hours at 32 pounds an hour equals 1,728 pounds.
Materials: 1,420 pounds at merchant prices, plus 10 per cent waste and delivery, so 1,590 pounds.
Skip and access: 280 pounds.
Electrician for two half days: 340 pounds.
That is a direct cost of 3,938 pounds.
Overhead recovery at 9 pounds an hour on 54 hours: 486 pounds. Running total 4,424 pounds.
Risk allowance for the unseen soil pipe connection: 200 pounds. Running total 4,624 pounds.
Margin at 18 per cent of the final price: divide by 0.82. Quote 5,639 pounds, call it 5,640 pounds.

The same job priced by feel usually lands somewhere near 4,800 pounds, which looks like a healthy number and is in fact a few hundred pounds of your own money spent on somebody else's bathroom.

What to do when the price is too high for the customer

Reduce the scope, never the rate. Take the tiling down from full height to half height. Leave the customer to do the removal and the disposal. Move the second fix to a week that suits your diary. Each of those changes the job, so each can honestly change the price. Cutting your hourly rate changes nothing about the job except how much of it you are paying for.

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This guide is general information for UK trades, written by the BidReady team. It is not legal, tax or financial advice. Rules change and individual circumstances differ, so take professional advice before acting on anything that matters.