The most common pricing mistake in the trades is setting your rate by looking at what other people charge. Their costs, hours and goals are not yours. Build your rate from your own numbers.
Step 1: what you need to pay yourself
Start with the yearly income you need, before tax. Include pension contributions and an allowance for holidays and sick days, which no employer is paying for.
Step 2: what the business costs
List every overhead for a year: van and fuel, insurance, tools and replacements, phone, software, accountant, advertising, workwear, training, scheme memberships and certifications and bank fees. Most small contractors underestimate this by a third.
Step 3: your billable hours
This is where reality bites. Out of a 50-hour week, how many hours are actually charged to a client? Quoting, buying materials, travelling, admin, callbacks and weather all eat into the week. Twenty-five to thirty-two billable hours a week is typical. Then take off holidays and slow periods: 44–48 working weeks is realistic.
Step 4: do the sum
break-even rate = (pay + overhead) ÷ (billable hours per week × working weeks)
Add a profit percentage on top so the business can save, invest and survive a bad month.
Example: £45,000 pay + £12,000 overhead ÷ (30 h × 46 weeks) = £41.30/h break-even. With 10% profit, that's £45/h, or about £365 for an 8-hour day.
Check it against the market
Once you know your number, compare it with local rates. If the market won't pay it, you need to cut overheads, raise billable hours (less travel, better scheduling), or move into work that pays better. Pricing below your number just means paying to go to work.
This guide is general information for estimating. It is not engineering, legal or tax advice. Check the Building Regulations and Building Control for your project.