Free tool
Day rate and pricing calculator
Two things most trades get wrong: setting a day rate off what the next man charges, and confusing markup with margin. Both calculators below fix that in about thirty seconds.
1. What day rate do you actually need?
Overheads means van, fuel, insurance, tools, phone, accountant, software, workwear and waste disposal — everything you pay for whether or not you work that week.
- Total to cover
- £51,000.00
- Minimum day rate
- £255.00
- Equivalent hourly rate
- £31.88
That figure is your floor, not your price. It's what you need to charge on every billable day just to hit your target after overheads — before tax, before National Insurance, and before a single job overruns. Anything you quote below it is costing you money to turn up.
If the number looks uncomfortably high, the honest fix is usually the billable-days box rather than the rate. Most people quietly assume they'll bill 240 days a year and then spend a day a week quoting, collecting materials and chasing payment.
2. Markup vs margin
This is the most expensive bit of arithmetic in the trades. Add 20% to your cost and you have not made a 20% margin — you've made 16.7%. Over a year of materials-heavy jobs that gap is real money.
- Price to charge
- £560.00
- Profit
- £160.00
- Actual margin
- 28.6%
To hit a target margin, divide your cost by (1 − margin ÷ 100). For a 30% margin on £400 of cost, that's £400 ÷ 0.7 = £571.43.
Common markups and what they leave you
- 10% markup = 9.1% margin
- 20% markup = 16.7% margin
- 30% markup = 23.1% margin
- 50% markup = 33.3% margin
- 100% markup = 50% margin
If a main contractor tells you they work on "20% margin", they mean a 25% markup. Knowing which one is being discussed before you shake hands is worth having.
Frequently asked questions
How do I work out my day rate as a self-employed tradesperson?
Add the income you want to take before tax to your annual overheads, then divide by the number of days you can realistically bill. Billable days are always fewer than working days once you subtract holiday, sickness, quoting, travel and admin.
What is the difference between markup and margin?
Markup is the percentage you add on top of your cost. Margin is the percentage of the final selling price that is profit. A 50% markup on £100 of materials gives a £150 price and a 33.3% margin — the two numbers are never the same.
How many billable days should I assume in a year?
There are about 260 weekdays in a year. Once you remove holiday, bank holidays, illness, quoting, chasing work and admin, most sole traders bill somewhere between 180 and 220 days. Being honest about this number is what stops a day rate coming out too low.
Should I charge materials at cost?
Most trades add a markup to materials to cover collection, delivery, storage, waste and the risk of having to redo a faulty part. Whether you show that markup separately or build it into the line price is a commercial choice, but do not simply pass materials through at cost.
Price it, then send it in a minute
Save your day rate and common materials as reusable items in Telaro, and every quote builds itself from the numbers you already trust.
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