Free UK trade pricing tool
What should your trade business actually charge?
Calculate the hourly rate, day rate and annual revenue your business needs to cover overheads, properly reward the owner and make a real profit.
Calculate your rateYour commercial rate
Price from the business backwards—not from competitors sideways.
Enter realistic annual figures. The result is a commercial planning rate before personal or corporation tax, not an instruction to charge every customer by the hour.
Your required pricing
At the figures entered, the current rate does not support your desired owner income and fixed overheads.
What your present £50 rate produces
At the same utilisation, it produces approximately £56,063 in annual revenue—£42,509 below the revenue required by your targets.
This is a commercial planning tool, not accounting or tax advice. Outputs depend entirely on the inputs and exclude personal tax, corporation tax, financing structure, bad debt and cash-flow timing. VAT treatment varies by business and type of work.
Why pricing goes wrong
Your competitors do not know what your business needs to charge.
Competitor prices can tell you something about the market. They cannot tell you whether those competitors understand their costs, earn the income you want, work the hours you want or make any worthwhile profit.
A rate copied from another tradesperson quietly inherits their van costs, working pattern, efficiency, ambitions and mistakes. Your price needs to begin with your own commercial reality.
This calculator works backwards from the money the business must produce and the genuinely billable time available to produce it.
Four numbers commonly missed
Why a simple wage divided by working hours is not enough
Non-billable time
Travel, quotes, buying materials, administration, cancellations and diary gaps still consume working time.
Fixed overheads
Vans, premises, insurance, equipment, software, marketing and professional fees must be recovered through sold work.
Owner reward
Payment for the owner’s labour is not the same thing as profit generated by the business.
Business profit
A business needs surplus for risk, investment, resilience and value beyond simply providing the owner with a job.
The calculation
How the trade pricing calculator works
The model separates capacity, costs and profit so that the final rate has a clear commercial basis.
1. Billable capacity
Available working hours are reduced by the percentage of time that cannot be recovered through customer prices.
weeks × days × hours × billable utilisation2. Required revenue
Owner reward and overheads are grossed up to allow for direct job costs and the target profit margin.
(owner income + overheads) ÷ (1 − direct cost % − profit %)3. Required rate
The annual revenue requirement is spread across the hours customers actually pay for.
required annual revenue ÷ annual billable hoursWorked example
Why a £50 hourly rate may not be enough
Consider an owner-operated trade business with a realistic allowance for time that cannot be billed directly.
- Desired owner income£45,000
- Annual overheads£24,000
- Working pattern46 weeks × 5 days
- Hours per day7.5
- Billable utilisation65%
- Direct costs15% of sales
- Target profit15% of sales
The business has 1,725 available working hours, but only 1,121 are expected to be billable after travel, quoting, admin and gaps.
It needs approximately £98,571 in annual revenue to provide the owner with £45,000, cover £24,000 of overheads and retain a 15% profit margin after direct job costs.
At £50 per billable hour, the same capacity produces only about £56,063 in annual revenue. The diary may feel busy, but the pricing cannot support the targets entered.
Billable utilisation
The number that changes everything
Five eight-hour days do not create 40 chargeable hours. A trade business also has to travel, answer calls, survey work, prepare quotes, collect materials, maintain equipment, manage reviews, resolve problems and deal with cancellations.
If a business prices as though every working hour is billable, the customers who do pay are not contributing enough to cover the hours that nobody pays for directly.
Utilisation is not the same as effort.
An owner may work extremely hard while recovering only 50% or 60% of that time through customer prices. The calculator makes that hidden time visible.
Use the rate intelligently
An hourly calculation does not mean you must sell hours.
| Pricing method | How the calculated rate helps | Important consideration |
|---|---|---|
| Hourly work | Use it as the minimum productive-hour charge before unusual materials, access or risk. | Set minimum charges so short jobs still recover travel and administration. |
| Day-rate work | Multiply the required productive-hour rate by the hours committed to the customer. | A day rate should not assume every minute on site is productive or ignore travel. |
| Fixed-price jobs | Estimate productive hours and apply the commercial rate, allowing separately for unusual materials and risk. | Avoid counting materials twice if the percentage entered already includes them. |
| Specialist work | The calculated figure provides a financial floor. | Expertise, urgency, scarcity, warranty and customer value may justify a considerably higher price. |
| Recurring services | Use annual job time and servicing costs to test the contract value. | Allow for cancellations, price increases, administration and the cost of maintaining the relationship. |
Owner income versus profit
If the owner has to do the work, all the money left over is not profit.
A useful commercial model gives the owner a fair reward for the work they perform and then asks whether the business produces a surplus beyond that reward.
This distinction matters when comparing employees, stepping away from delivery or valuing the company. If all apparent profit disappears when someone has to be paid to replace the owner’s labour, the business may be providing a good income without yet generating much transferable profit.
The calculator therefore treats desired owner income and target business profit as separate requirements. This is a management distinction, not a statement about how either amount should be treated for tax or accounting purposes.
Frequently asked questions
Pricing a UK trade business
How do I calculate an hourly rate for a trade business?
Add the annual owner reward and fixed overheads the business must support, allow for direct job costs and target profit, then divide the resulting revenue requirement by genuinely billable annual hours. Do not divide only by total hours worked.
What should a self-employed tradesperson charge per hour?
There is no reliable universal rate. The correct commercial rate depends on desired income, overheads, billable capacity, direct costs, profit target, expertise, market position and customer demand. Local competitor prices provide context but cannot replace your own calculation.
What should be included in business overheads?
Include costs that continue regardless of an individual job: vehicles, insurance, premises, equipment replacement, software, phones, professional fees, licences, finance, marketing, administration and other recurring business costs. Avoid counting direct job costs twice.
What is billable utilisation?
Billable utilisation is the percentage of available working time recovered through customer prices. Travel, quotations, material collection, administration, diary gaps and other non-chargeable activities reduce it. The calculation should reflect the real business rather than an ideal week.
Should materials be included in the hourly rate?
The tool can allow for average direct job costs as a percentage of sales. If you instead add the full cost of materials and subcontractors separately to each quote, do not include the same amounts again in the percentage input. Whichever method you use, apply it consistently and include an appropriate contribution towards purchasing time, waste, warranty and risk.
Should I add VAT to the calculated price?
If you are VAT-registered and the supply is taxable, VAT may need to be added at the applicable rate. VAT rules and rates vary by work type and can change, so confirm the correct treatment with HMRC or your accountant. The calculator’s VAT option is for displaying the customer-facing total only.
Is owner income the same as business profit?
Not commercially. Owner income rewards the work performed by the owner. Business profit is the surplus remaining after the business has supported that reward and its other costs. The legal and tax treatment depends on business structure and should be confirmed professionally.
What if customers will not pay the calculated rate?
That reveals a commercial problem rather than making the calculation wrong. The business may need stronger positioning, different customers, greater efficiency, higher-value work, lower overheads, improved utilisation or a different service model. Continuing at an inadequate rate simply hides the gap.
How often should I review my prices?
Review them whenever significant costs, capacity or ambitions change and at least as part of an annual planning process. Vehicle, wage, insurance, material and marketing costs can move independently, so a small blanket increase may not always be enough.
From pricing to growth
A better rate can change the entire business.
Stronger pricing can fund better equipment, proper marketing, reliable systems, staff development and the capacity to step back from constant delivery. It can also reduce the number of jobs required to reach the same revenue and profit.
But price cannot be changed in isolation. The website, proof, customer experience, specialism and sales process must give customers a reason to choose the business on something other than being cheapest.
Local Edge Digital helps trade and service businesses understand the underlying commercial constraint, then implements the website, SEO, Google visibility or customer journey needed to support the right next move.
Does the number look very different from your current price?
Let’s understand what needs to change around it.
Tell Melissa where the business is now, what you want it to produce and what currently feels stuck. The first conversation is straightforward and pressure-free.