Quick Answer
Most tradespeople I speak with are guessing their margin. They quote off a day rate, slap a round number on materials and hope the job pays for itself. This free pricing calculator does the maths for you. Drop in your labour hours, your charge-out rate, your materials cost and a markup percentage. The spreadsheet returns the net total, the VAT, the grand total, your gross profit in pounds and your real margin as a percentage. Excel or Google Sheets. No formulas to write.
Table of Contents
- Download the free template
- Why guessing your margin loses you money
- Markup vs margin: the rule most tradies get wrong
- What is inside the calculator
- How to use it in under 10 minutes
- Setting your labour charge-out rate
- Setting your materials markup
- Using AI to fill the calculator faster
- My verdict
- What tradespeople are saying
- Recommended videos
- Frequently asked questions
Download the free template
I built this with the team at TrainAR because we kept hearing the same story from engineers and sparks coming through our apprenticeship work. They could fit a boiler, wire a flat or run a job to a deadline. But they were losing money on jobs they thought were profitable. Not because they were lazy with the maths. Because nobody had ever shown them the difference between markup and margin in a way that stuck.
The calculator below works in both Excel and Google Sheets. One file, two options.
Microsoft Excel
Google SheetsBoth apps run on iOS, Android, Mac and Windows. Quote on site, send the PDF before you leave the driveway. Formulas convert cleanly between the two.
Trades Pricing Calculator (.xlsx) · Free, no signup, edit and reuse it however you like.
Why guessing your margin loses you money
A badly priced job is the single biggest profit killer for a small trades business. Worse than a bad customer. Worse than a slow payer. Bad pricing eats you alive and you do not notice until the bank balance tells you.
The pattern is always the same. The engineer quotes off the top of their head. They double the materials, add a day rate, round it to a number the customer will accept. The job runs over by half a day. The merchant invoice comes in higher than expected. Suddenly the £1,800 quote produced £200 in real profit and the engineer wonders why the van fuel and the accountant bill leave nothing left.
The fix is not complicated. You stop quoting from memory. You use a structured calculator that forces you to itemise the labour, itemise the materials, apply a markup that reflects your real overhead, and check your gross margin before you press send. Five extra minutes. Hundreds of pounds back per month.
If you want the long version of the diagnosis, our guide on building professional quotes in ServiceM8 walks through the conversion side of quoting. This article focuses on the maths underneath.
Markup vs margin: the rule most tradies get wrong
Here is the single most common mistake I see. A tradesperson tells me they run "30 percent margin on materials". You ask them how they calculate it. They say, "I just add 30 percent to what I paid." That is not 30 percent margin. That is 30 percent markup. And the difference matters.
Markup is profit as a percentage of your cost.
Margin is profit as a percentage of your selling price.
Buy a part for £100. Sell it for £130. That is a 30 percent markup. But your margin is 30 / 130, which equals 23.1 percent. If you wanted a clean 30 percent margin on that part, you would need to sell it for £143. Big difference once you scale it across a year of jobs.
15% markup = 13% margin
20% markup = 16.7% margin
25% markup = 20% margin
33.3% markup = 25% margin
50% markup = 33.3% margin
100% markup ("keystone") = 50% margin
The calculator handles this for you. You enter the markup percentage you want on each material line. The Profit Margin Checker at the bottom shows your real gross margin as a percentage of the total quote. No mental arithmetic. No misremembered shortcut.
For deeper background on margin maths, the team at Omnicalculator have a clean explainer with worked examples. The Excel Skills margin and markup template is also a good cross-reference if you want to see how accountants build the formulas from scratch.
What is inside the calculator
The spreadsheet is split into four sections plus a margin checker at the bottom. Each section feeds the next.
Business name, quote reference, client name, job description. Fill the business details once. The reference (Q-001, Q-002) gives you an audit trail when the customer accepts. Vague descriptions get challenged on price, so be specific about scope.
Six labour lines. Each one takes a description, hours, charge-out rate and number of workers. The sub-total auto-calculates per line. A labour total at the bottom feeds the summary. The default rate column is blank so you set your own.
Ten material lines. Item, supplier, quantity, your cost ex VAT, and a markup percentage per line. Default markup is 20 percent. You can raise it on specialist parts and lower it on bulk supplier-account fittings. Sub-totals roll up to a materials total.
Net labour, net materials with markup applied, net total ex VAT, VAT amount and grand total inc VAT. Change the VAT rate from 20 percent to 5 percent or 0 percent on qualifying work. The grand total is what your customer pays.
The bit most tradies have never seen. It pulls your raw material cost (what you actually paid the merchant) against your net selling price, then shows gross profit in pounds and gross margin as a percentage. If that percentage is under 20, something needs to change before you send the quote.
How to use it in under 10 minutes
Open the .xlsx file. Start on the Pricing Calculator tab. The How to Use tab has the short version too. Here is the walkthrough.
- Top section. Type in your business name, the quote reference, the client name and a one-line job description. These fill out the top of any PDF you generate.
- Labour. For each task, write a short description, the hours you expect, your hourly charge-out rate and the number of workers. The sub-total appears automatically. Use one line per distinct task. Travel, stripping out and snag fixing all get their own line.
- Materials. List every item by name and supplier, the quantity and the price you pay ex VAT. Set the markup percentage per line. Keep the default 20 percent for most parts. Push specialist items to 30 or 35. The sub-total and the materials total update live.
- VAT. The default rate is 20 percent. For qualifying energy-saving work (heat pumps, insulation, solar PV under the zero rate window) drop it to 0 or 5 percent as the rules require. For new build residential work, check with your accountant first.
- Margin check. Scroll to the Profit Margin Checker. Gross profit in pounds and gross margin as a percentage. If the percentage is under 20, raise your markup or your labour rate before sending.
- Save as PDF. File > Download > PDF in Google Sheets. File > Save As > PDF in Excel. Email it as an attachment. Keep the spreadsheet so you can refer back if the scope drifts. If the job is gas work, sign off the install with our free CP12 gas safety certificate template at the end.
Save the master file, then duplicate the Pricing Calculator tab for each new quote. In Google Sheets, right-click the tab and pick Duplicate. In Excel, hold Ctrl and drag the tab. Rename each one with the client name and date. You end up with a quoting log you can search a year later.
Setting your labour charge-out rate
Your labour rate is the lever most engineers under-set. They look at their old wage as an employee, add a bit and call it their charge-out rate. That is not the right number.
Your charge-out rate has to cover your wage, your van, your tools, your insurance, your accountant, sick days, quiet months, holidays you actually take, training days, the apprenticeship levy if you employ a young engineer, and the gap between billable hours and total working hours. Most sole traders bill 60 to 70 percent of the hours they work. The other 30 to 40 percent is travel, admin, quoting, chasing money. Your billable hour has to pay for the non-billable one as well.
The 2026 UK ranges are roughly:
- Plumber: £45–£75/hr nationally. London and the South East run £65–£105/hr.
- Electrician: £45–£65/hr nationally. London rises to £80–£100/hr for Part P-certified domestic work.
- Heating engineer: £45–£80/hr nationally. Higher for Gas Safe-certified renewables work and heat pump installs.
- General builder: £35–£60/hr depending on region.
- Labourer or apprentice: the National Living Wage from April 2026 is £12.71/hr. That is the floor. Add NI, pension and overhead.
If you are charging less than the regional range and winning every job, you are too cheap. There is a useful rule of thumb: if you win more than 80 percent of your quotes, your prices are too low. If you win less than 20, they are too high. The sweet spot is 30 to 50 percent. Checkatrade publish current UK tradesperson rates by trade and region if you need a sanity check on your number.
Setting your materials markup
The second lever is materials markup. This is where most tradies have inherited a bad habit. They charge cost price or close to it because they think the customer will spot the markup and complain. The customer will not. Plumbers Merchants and electrical wholesalers have priced this in for decades. It is part of running the business.
The standard UK range is 15 to 30 percent markup on materials. The reasons are not glamorous but they are real:
- Time spent ordering, collecting and delivering materials to site.
- Wastage and offcuts that go in the skip.
- The risk that a part you order specially turns out to be wrong and goes back.
- Stock you carry in the van that sits there until the right job comes along.
- Warranty risk when a fitting fails and you go back to replace it for free.
- Supplier account credit risk when a customer takes 90 days to pay.
You lose the markup. You inherit the warranty risk. You spend half the morning waiting for a delivery that turns up wrong. If the customer insists, raise your labour rate to cover the lost margin and add a clause that says you are not responsible for failures in customer-supplied parts. Plenty of tradespeople on the Screwfix Community forum refuse customer-supplied parts outright. That is a defensible position.
If you currently charge zero markup, adding 15 to 20 percent to a typical bathroom or boiler job will add £150 to £400 in margin without changing your labour rate. Multiply that by even one job a week and you are looking at £7,800 to £20,800 of recovered margin a year. The customer pays the same kind of price they expected. You stop losing money on the parts handling.
Using AI to fill the calculator faster
The spreadsheet does the maths. AI can do the writing. If you are still typing out labour line descriptions and materials lists every time, you are wasting your evening.
Take a photo of the job. Describe it to ChatGPT, Claude or Gemini in two lines. "Replace combi boiler with a 30kW system boiler and hot water cylinder, install on existing pipework, no flue change." Ask for a list of labour tasks with typical hours and a materials list with realistic quantities. Paste the labour descriptions straight into the calculator. Adjust the hours and rates to your numbers. Add your supplier prices to the materials block.
What used to be 20 minutes of typing becomes 5. The maths is still done by the spreadsheet so your margin protection is intact. You just stop spending your time writing the same line descriptions over and over. The same approach works on the back end too: feeding the completed job into a structured job report template closes the loop on paperwork in another five minutes.
"I am a UK Gas Safe heating engineer quoting a job: replace a 24kW combi with a new 30kW combi, retain existing pipework and flue, magnetic filter on the return, power flush. Break this into labour tasks with realistic hours for one engineer. Then list materials with typical UK trade prices ex VAT for the combi, magnetic filter, flushing chemical, isolating valves and consumables. Output as two tables I can paste into a spreadsheet."
Output goes straight into the calculator. Your judgement is still doing the pricing. The AI just removes the typing.
The bigger move, and one I am genuinely excited about, is photo-to-quote. Snap the job from three angles. Hand it to a multimodal AI. Ask for an itemised quote with assumptions called out. The technology is not perfect yet for trades work but it is closing fast. The free template in this article gives you the structure you need so when AI quoting is mainstream, you already know your labour rate, your markup and your margin floor.
If you are still quoting from your head, this template will pay for itself on the first job. The Profit Margin Checker is the part most tradespeople have never seen written down. Use it for a month and you will spot at least one job per week where you were quoting below 20 percent margin and did not realise. Adjust the markup, raise the labour rate, and the bank balance will look different by the end of the quarter. When you are doing more than 30 quotes a month, look at moving to dedicated job management software so the calculator becomes the engine inside a quoting workflow rather than a standalone file. Our ServiceM8 invoice template is a sensible next step once the maths is dialled in.
What tradespeople are saying
Pricing is one of the most discussed topics on UK trade forums. Here is a snapshot of what real tradespeople are sharing about markup, margin and quoting.
Recommended videos
Six videos that go deeper on pricing, markup and margin for trade businesses. Watch one a week with a brew and your pricing will be sharper inside a month.
Create a quote spreadsheet in Excel
Eric Barstow
Know your numbers, protect your margin
Adaptive (with Shawn Van Dyke)
How to be a Profit First contractor
Breakthrough Academy
How to estimate jobs as a contractor
Cody Cockroft
Quoting and invoicing with Jobber
Jobber
Construction estimating for beginners
SoCal Contracting Academy
Frequently asked questions
Markup is profit as a percentage of your cost. Margin is profit as a percentage of your selling price. Sell a 100 pound part for 130 and that is 30 percent markup but only 23 percent margin. Most tradespeople think they are running 30 percent margin when they are actually running 23. The calculator works this out for you on the Profit Margin Checker line.
The working range is 15 to 30 percent. Most tradespeople use 20 percent as a default and slide higher on specialist or ordered parts where they take more risk. Some use a sliding scale: higher markup on cheap consumables, lower on big-ticket items like boilers or consumer units. Either approach is defensible. Never charge zero markup. You are paying for the procurement out of your own pocket if you do.
Yes. The VAT rate cell in the Summary section is editable. Default is 20 percent. Change it to 0 for qualifying installations during the zero rate window on energy saving materials (heat pumps, insulation, solar), or 5 percent for reduced rate work. The rest of the calculation updates automatically. If you are unsure which rate applies, check the HMRC notice or call your accountant. The wrong rate creates problems at MTD time.
Below 15 percent is too thin. 15 to 20 percent is acceptable for high-volume, lower-skill work. 25 to 35 percent is the healthy range for most UK trades. Above 35 percent is achievable in specialist niches, emergency work or high-demand areas. The Profit Margin Checker shows you the live number as you build the quote. If it is below your target, raise the markup or the labour rate before you press send.
Yes. Download the .xlsx file, upload it to Google Drive, right-click and pick "Open with Google Sheets". The formulas convert across cleanly. If you prefer to keep the file in Google Sheets format permanently, go to File then Save as Google Sheets once it is open. After that it lives in your Google account and you can edit it from your phone, tablet or laptop.
No. If your turnover is below the 90,000 pound VAT threshold, set the VAT rate cell to 0 percent and the calculator still works for net pricing. Add a note on the PDF that says "Not VAT registered" so the client is not surprised. The labour, materials and margin calculations all behave the same way regardless of VAT status.
No. Print or PDF the quote with only the line item totals visible, not the markup column. The customer should see the work and the price. They do not need to see the merchant cost or the markup percentage. The calculator is designed so you can hide or delete the markup column before generating the PDF if you prefer.
