To price a job properly, you cover your labour at your true hourly rate, your materials with a markup, a share of your overheads, and a profit margin on top — then check the total against what the job is worth. Tradies lose money when they price off gut feel and forget one of these layers.
Layer 1: Labour at your real rate
Price the labour at your properly-calculated hourly rate — the one that already accounts for unbillable time, overheads, super, and tax. If you’re quoting labour at a rate you plucked from the air, every hour on the job might be losing you money before you’ve bought a single part.
Layer 2: Materials, with a markup
Charge for materials at more than you paid. A materials markup covers the time and cost of sourcing, collecting, storing, and warrantying the parts, and it’s completely standard. Charging materials at cost means you’re doing all that work for free.
Layer 3: A share of overheads
Every job should carry a slice of your fixed costs — the ute, insurance, tools, software, phone. If your hourly rate is calculated properly, a lot of this is already baked in, but it’s worth checking that the job as a whole pulls its weight against your overheads.
Layer 4: Profit
Profit is not what’s left over by accident — it’s a deliberate margin you add on top. A business that only ever breaks even has no buffer for slow periods, no capacity to invest, and no reward for the risk of running it. Build margin in on purpose.
The check: what’s it worth?
Once you’ve built the price up from costs, sense-check it against the value of the job and the market. Sometimes you’ll find you can charge more than your cost-plus number — take it. Sometimes the market won’t bear it and you decide whether the job’s worth doing. Either way, you’re deciding with real numbers.
Knowing which jobs actually pay
The tradies who price well are the ones who can see which past jobs actually made money and which didn’t. TradieO’s profitability reporting shows you margin by job type — so your pricing gets sharper over time instead of staying a guess.
Frequently asked questions
What’s a reasonable materials markup?
It varies by trade and item, but charging materials at cost is leaving money on the table. A markup covers your sourcing and warranty effort.
Should I quote fixed price or hourly?
Fixed price gives the customer certainty and rewards you for efficiency; hourly protects you on unpredictable jobs. Many tradies use fixed for defined work and hourly for open-ended jobs.
How do I stop under-quoting?
Build every quote from the four layers above rather than guessing, and review your actual margins afterward so you learn where your estimates go wrong.