How to Price a Trade Job - Materials, Labour, Markup, and VAT

Most tradesmen underprice their work - not because they lack skill, but because they are guessing at material costs, underestimating time, and forgetting to add VAT on top of everything else.

This guide gives you the formula for pricing a trade job correctly, so that every quote you send has your margin protected.

The pricing formula

Every trade job price is built from the same components:

Job price = (Materials cost + markup) + Labour + VAT

Most tradesmen know this in theory but apply it inconsistently. The sections below go through each component clearly.

Step 1: Materials cost and markup

List the materials you will need and check current prices with your supplier before quoting - not after. Prices fluctuate and quoting from memory will cost you on busy months.

Once you have the net materials cost, add a markup. The markup covers:

• Your time sourcing, ordering, collecting, and handling the materials
• Carrying the cost of materials before the customer pays you
• The risk of waste, breakage, or over-ordering
• A reasonable profit on your supply function

A typical materials markup for trade work is 15% to 25%. Use the lower end for large straightforward orders where sourcing effort is low. Use the higher end for specialist items, small quantities, or urgent supply.

Example: Materials cost €1,200. Markup at 20% = €240. Materials line in your quote: €1,440.

Step 2: Your day rate

Your day rate needs to cover four things:

• Your income target - the yearly profit you need before personal tax, not your take-home pay. Personal tax comes out of this figure, so set it high enough to leave the take-home you want.
• Non-billable days - holidays, training, admin, quoting, illness. Once you take those out, you may only have 200-220 billable days a year, not 260.
• Business costs - insurance, tools, vehicle, phone, accounting software
• Time buffer - for jobs that run longer than estimated

A rough starting point: add your income target to your yearly business costs, then divide by your billable days. If you need €50,000 profit before tax, your business costs are €15,000 a year and you have 210 billable days, your minimum day rate is approximately €310/day before VAT - before any time buffer. These are example figures - use your own.

Do not calculate your day rate based on what you think the market will pay without first checking whether that covers your actual costs and income target. Many tradesmen find they have been undercharging once they do this calculation properly.

Step 3: Time estimate

Be honest about how long jobs actually take, not how long they take on the best days. Common time estimation mistakes:

• Quoting best-case conditions (perfect access, no surprises, customer ready on day one)
• Forgetting travel time - getting to and from site is your time
• Forgetting prep, setup, and cleanup
• Not accounting for return visits for snagging

If a bathroom renovation has averaged 3.5 days over your last 10 jobs, quote for 3.5 days. Not 3.

Step 4: VAT

If you are VAT-registered, add VAT on top of the full net price. Do not embed it in your total without showing it separately - and do not absorb it into your margin.

VAT rates for common situations:

Applying 23% to a job that should be 13.5% in Ireland is a common mistake that overcharges the customer and can damage trust. In the UK, the mistake to avoid runs the other way: charging 5% on ordinary work on a home that should be 20% leaves you owing HMRC the difference. See the full guide on VAT for sole traders in Ireland or our UK VAT guide.

Worked example: boiler replacement in Ireland

Example figures only - price your own job.

Check the two-thirds rule before you send it. The goods cost you €1,080, and two-thirds of the €1,716 price is €1,144, so this job stays at 13.5% - but only just. A boiler that cost you a few hundred euro more, or half a day less labour, would push the goods over two-thirds, and then the whole job is 23%. In the UK, the same job would be 20%.

Common pricing mistakes to avoid

• Forgetting VAT: If you are registered, VAT goes on top. Not factoring it in means you pay it out of your own margin.
• Zero markup on materials: You are sourcing, carrying, and warranting those materials. Charge for it.
• Underestimating time: Add 10-15% buffer on any estimate unless the job type is very familiar.
• Quoting from memory on material costs: Check actual prices before sending the quote, not after accepting a job.
• Ignoring travel time: If the job is an hour away, that is two hours per day of time that has a cost. Add it.

Or get early access to PayReady - it's free: describe the job, and PayReady AI builds a structured quote. Set your VAT rate once and PayReady works it out on every quote and invoice.