How Tradies Should Price Jobs Properly and Stay
Updated: Oct 15
Pricing jobs properly is one of the biggest challenges for tradies.
Too often, jobs are quoted based on what others are charging or what feels about right at the time. The problem is, if your numbers are not clear, you can stay busy without actually making money.
If you want to improve cash flow and build a stronger business, your pricing needs to be based on real costs and the right margin.
Know Your True Cost Per Job
Before you can price any job properly, you need to know what it actually costs you to complete it.
Materials
Start with everything required to get the job done
Materials like timber, pipes, wiring or fittings
Consumables such as adhesives, screws or sealants
Delivery or supplier fees
For example, if you are a Brisbane builder or carpenter, every quote should include all materials and delivery costs, not just the obvious items.
Labour
Labour is where most tradies underestimate their costs.
It is not just your hourly rate. You need to include:
Wages for you and your team
Superannuation (currently 12%)
Workers' compensation
Time spent quoting, travelling and doing admin
Public holidays, annual leave and sick days
Downtime like rain days
Pro tip: Work out your true hourly cost, not just what you pay yourself or your staff. This is where many jobs lose money.
Overheads
Even when you are not on the tools, your business still has costs.
These include:
Ute or vehicle costs, fuel and maintenance
Tools and equipment
Insurance and licences
Accounting, software and subscriptions
Rent or storage if applicable
These overheads need to be built into every job, otherwise you are absorbing them personally.
Add a Margin That Actually Pays You
Once you know your total cost, you need to add a margin. This is what turns a job into profit.
Price=Total Cost×(1+Margin)
For example:
Total job cost: $2,000
Margin: 20%
Job price: $2,400
As a guide for tradies:
Most trades aim for 15% to 25% margins
More specialised or higher risk work can justify higher margins
If you are not building in a margin, you are just covering costs and not growing your business.
Stop Guessing Based on Other Tradies
It is common to ask around and see what others are charging.
The issue is, their numbers are not your numbers.
They might:
Have lower overheads
Pay different wages
Run a completely different setup
Trying to beat others on price often leads to taking on work that is not worth it.
Focus on your own costs and price based on the value you deliver.
Adjust for Your Local Market
Where you operate makes a difference.
Brisbane and Gold Coast often support higher rates due to demand
Regional areas may be more price sensitive
Busy periods mean you can be more selective and hold your margin
You should also allow for compliance costs such as WHS requirements and council permits where relevant.
Review Your Pricing Regularly
Costs change all the time. Materials go up, wages increase and fuel never stays the same.
If your pricing does not keep up, your margin slowly disappears.
Make sure you:
Review your pricing every 6 to 12 months
Adjust for increases in materials and labour
Update your quoting templates
Use Job Costing Tools to Stay on Track
If you are still estimating jobs in your head or on paper, it is easy to miss costs.
Using software helps you:
Track actual job costs
See where you are making or losing money
Quote more accurately
Improve consistency across your jobs
Tools like Servicem8, Tradify, Fergus along with Xero, MYOB and QuickBooks Online can help, especially when set up properly.
How Rise Accountants Can Help
We work with tradies across Brisbane and Queensland to get their pricing and job costing right. At Rise Accountants, we help you understand your real costs, set margins that make sense for your trade and put systems in place so you can quote with confidence. With the right structure, you can stop second guessing your pricing, improve cash flow and make sure the work you are doing is actually worth it.
Frequently Asked Questions
How do I know if I'm charging enough for a job?
Start by understanding the true cost of completing the job, including materials, labour, subcontractors, travel and a share of your business overheads. Your price then needs to allow for an appropriate profit margin. If you're consistently busy but seeing little improvement in profit or cash flow, your pricing is worth reviewing.
What's the difference between markup and margin?
Markup is the amount added to your costs to arrive at a selling price, while margin measures the profit as a percentage of the final selling price. They aren't the same thing, so it's important to understand which calculation you're using when preparing quotes.
What costs should tradies include when quoting a job?
A quote should consider more than materials and wages. Depending on your business, costs may include superannuation, workers' compensation, vehicles, fuel, tools, insurance, software, licences, administration, travel time and other overheads associated with running the business.
Should I base my prices on what other tradies are charging?
Competitor pricing can provide useful market context, but it shouldn't determine your prices. Another business may have completely different wages, overheads, equipment and operating costs. Your pricing needs to reflect your own costs and the profit your business needs to generate.
How often should I review my pricing?
Pricing should be reviewed regularly and whenever there are significant changes to labour, materials, fuel, insurance or other operating costs. If your costs increase but your prices remain unchanged, your profit margin can gradually decrease without being immediately obvious.
How can job costing improve my pricing?
Job costing allows you to compare what you expected a job to cost with what it actually cost. Over time, this can highlight quoting errors, unexpected labour or material costs and particular types of work that may be more or less profitable. You can then use that information to improve future quotes.
Can I be busy but still not be making enough profit?
Yes. A full pipeline doesn't necessarily mean a profitable business. If jobs are underquoted or important costs and overheads aren't being recovered, taking on more work can increase revenue without delivering the level of profit you expect.
When should a tradie speak to an accountant about pricing?
It's worth reviewing your numbers if you're consistently busy but cash feels tight, profit isn't increasing, you're unsure what your true hourly cost is or you're regularly finding that jobs cost more than expected. Understanding your actual costs and margins can make pricing decisions much clearer.
