How to Price a Job as a Tradie:
A Worked Example

Here’s how to build a quote from the costs up and check whether the job paid what you expected.

Start with what the customer is asking for

Write down what’s included, what access you’re assuming and who supplies what. For an electrical job, for example, will you supply the fittings? Are you allowing for patching afterwards? If the scope changes, agree on the extra work and the price with the customer before going ahead.

Add up the real cost of doing the job

• Labour. Estimate the hours the job will take, including job-specific travel, pickups, setup and clean-up where applicable. Include the cost of your own time. For employees, allow for relevant employment costs as well as wages.
• Materials and other direct costs. Use current supplier prices and allow for delivery, consumables, waste, subcontractors and equipment hire where they apply.
• Overheads. Give the job a share of costs such as insurance, software and general vehicle expenses. One starting point is to divide annual overheads by realistic annual billable hours and apply that hourly amount to the job. Count each expense once.
• Uncertainty. If access is awkward or quantities are uncertain, allow for the risk you’re taking on and state the assumptions clearly in the quote.

Worked example: cost, markup and margin

Say your estimate looks like this, with all amounts on the same GST basis:

If you want a 20% margin on the selling price, divide $940 by 0.80. The quote comes to $1,175, leaving $235 after the costs in the estimate. The $235 is 20% of the selling price.

If you add a 20% markup to the same cost, the quote comes to $1,128. That leaves $188, or about 16.7% of the selling price. A markup is calculated on cost. A margin is calculated on the selling price. The example uses illustrative costs and a sample margin. Use your own numbers and handle GST as applicable when you prepare the customer quote.

Check the quote against the finished job

After the job, compare the time and materials you allowed with what you actually used. If labour ran two hours over at $65 an hour, that’s $130 in extra labour cost. The $235 you expected to have left drops to $105 on the same quote, before any other cost changes.

Work out where the extra time went. If the same thing happens on the next two jobs, change the allowance in your quote template. If it was extra work the customer requested, check how you record and price variations.

Make the next quote easier to put together

Pick a job you do often and keep a simple record of the quoted price, actual hours, materials and extras. That gives you something concrete to use next time someone asks, “How much?”

For a routine to keep those numbers up to date, see our weekly bookkeeping checklist for tradies. If your books need a catch-up, Bookflow offers fixed pricing for agreed bookkeeping work and regular direct debit payments.

This article uses illustrative figures for general information only. Use your own costs, and treat GST as it applies to your business.