How to Price a Job as a Tradie (Without Underquoting)

Why tradies underquote in the first place

Most tradies do not underquote because they are bad at the job. They underquote because they are guessing. They pluck a number that feels about right, hope it beats the other bloke, and worry that a fair price will scare the customer off. The trouble is, a number that feels right is almost always too low. You forget the drive time, the trip to the supplier, the quote you wrote at 9pm, the insurance, the super, the ute rego. Add all that up and the 'good' job you won turns out to be one you paid to do.

Pricing well is not about being greedy. It is about staying in business, doing quality work and still being around in five years. Let us break it down properly.

Work out your true hourly cost

Before you can price a job, you need to know what an hour of your time actually costs you to put on the tools. This is not what you want to earn. It is your break-even number, the point where you have covered everything just to keep the doors open.

Count everything, not just your wage

Your true cost per hour includes a lot more than the rate you pay yourself. Run through this list and be honest:

Your wage and the wage of any staff or apprentices
Superannuation for yourself and the team
Insurance including public liability, tools and income protection
Vehicle costs such as rego, fuel, servicing and lease repayments
Tools and equipment replacement and repairs
Software, phone and admin including accounting and any subscriptions
Downtime you cannot bill for like quoting, invoicing, chasing payments and driving between jobs

That last point is the one that catches everyone. You might work a 50 hour week, but only 30 of those hours are actually billable. If you divide your total costs across only the hours you can charge for, your real hourly cost is far higher than you think. Do this maths once and it changes how you quote forever.

Add materials, then add margin

Once you know your labour cost, materials are the next piece. Charge what you paid, plus a markup to cover the time you spend sourcing, collecting, storing and warranting them. If a fitting fails, the customer rings you, not the supplier, so that markup is fair payment for carrying the risk.

A common approach is to add a markup of anywhere from 10 to 30 per cent on materials, depending on the trade and the item. The exact figure is yours to set, but the principle is simple: materials should never be a cost you absorb. Pass them on properly and add something for your trouble.

Then comes margin, the profit that sits on top of your costs. Margin is not a dirty word. It is what funds a new ute, a rainy day, or a proper holiday. Without margin you have a job, not a business.

Price for value, not just for time

Here is where a lot of tradies leave money on the table. They price by the hour and nothing else. But the customer is not really buying your hours, they are buying the result: a leak fixed fast, a switchboard that will not trip, a job that passes inspection first go.

If your 20 years of experience means you solve in one hour what takes someone else four, you should not be punished for being good. Price the outcome. A fast, clean, reliable fix is worth more to the customer than a slow, cheap one, and most will happily pay for the peace of mind.

When to charge a call-out fee

A call-out fee covers the cost of simply turning up, before a single job is done. It is completely reasonable, especially for:

Emergency and after-hours work where you drop everything to attend
Diagnostic jobs where the value is in finding the problem, not just fixing it
Areas far from your base where travel eats a big chunk of the day
Quotes that require real investigation rather than a quick look

Be upfront about the call-out fee when the customer first calls. Set the expectation early and there are no nasty surprises later. If you miss that first call, though, you never get the chance to set anything. A tool like InstantLead texts back missed calls in seconds and captures the caller's name, job and urgency, so you can decide which jobs are worth attending and quote them properly rather than losing them to the next tradie on the list.

Avoid the race to the bottom

There will always be someone willing to do it cheaper. Chasing the lowest price is a fight you cannot win, because there is always a rung below you and eventually you hit zero. The tradies who thrive compete on trust, reliability and quality, not on being the cheapest name in the quote pile.

When a customer says you are dearer than the other quote, that is not a rejection, it is a conversation. Explain what is included: the licensed work, the warranty, the fact you turn up when you say you will and clean up after yourself. Cheap quotes often hide corners cut. Your job is to make the value obvious, not to drop your price to match.

Present your price with confidence

How you deliver the number matters almost as much as the number itself. If you mumble the price and apologise for it, the customer senses doubt. If you state it plainly and back it up, they trust it.

Put it in writing with a clear, itemised quote so there is no confusion
Explain what is included so the value is visible, not just the total
Do not apologise for a fair price, own it
Follow up if you do not hear back, a quick call or text often seals the deal

Remember, the customer who only ever picks the cheapest quote is rarely the customer you want anyway. Price for the work you are proud of, and you will attract the people who value it.

The bottom line

Underquoting feels safe because it wins jobs, but it slowly bleeds your business dry. Work out your true hourly cost, mark up your materials, build in real margin, and price the value you deliver rather than just the clock. Do that consistently and you stop being the busy tradie who never gets ahead, and start being the one who runs a business that actually pays.

Quote fairly, quote confidently, and never let the fear of losing a job talk you into a price that loses you money.

Frequently Asked Questions

How much should I mark up materials as a tradie?

There is no single right number, but many tradies add between 10 and 30 per cent on top of what they paid. The markup covers your time sourcing, collecting and storing materials, plus the warranty risk you carry when something fails. The key rule is to never absorb material costs yourself.

Should I charge a call-out fee?

Yes, in most cases a call-out fee is fair. It covers the cost of turning up before any work begins, which is especially important for emergency, after-hours, diagnostic or long-distance jobs. Just be upfront about it when the customer first calls so there are no surprises.

How do I handle a customer who says my quote is too expensive?

Treat it as a conversation, not a rejection. Explain what is included, such as licensed work, warranty, reliability and cleanup, so the value is clear. Cheaper quotes often cut corners. If you compete on trust and quality rather than price, you attract better customers.

What is the biggest mistake tradies make when pricing jobs?

Guessing. Most underquote because they never work out their true hourly cost, forgetting things like super, insurance, vehicle costs and unbillable time spent quoting and driving. Once you know your real break-even rate, you can price with confidence instead of hoping the number is close enough.

Never lose a quote to a missed call again

You can only price a job if you know it exists. InstantLead texts back your missed calls in under five seconds, captures the caller's name, job and urgency, and alerts you straight away, so you can quote the good jobs properly instead of losing them to the next tradie. get in touch or start your free first month at portal.instantlead.com.au/register.