How Much Should You Charge? Setting Your Day Rate as a Self-Employed Tradesperson

It's the question every tradesperson wrestles with when they first go self-employed, and honestly, it never fully goes away. Charge too much and you lose work. Charge too little and you're busy but broke. Finding the right rate, one that covers your costs, pays you properly, and stays competitive, is one of the most important things you'll do in your business.

Here's how to think about it properly.

Why "What Do Others Charge?" Is the Wrong Starting Point

Most people start by asking around or searching online: "What's the going rate for a plumber?" or "How much do painters charge per day?" There's nothing wrong with knowing what your competitors charge, but it shouldn't be the starting point.

Why? Because someone else's rate is based on their costs, their experience, their overheads, and their local market. If a plumber in a smaller city charges £200 / $300 / $350 AUD a day and you're in a major metro area with a van lease that's double theirs, a family to feed, and ten more years of experience, copying their rate makes no sense.

Start with your own numbers.

Step 1: Work Out What You Need to Earn

Before you think about day rates, figure out what you actually need to take home each year to live comfortably. Include everything personal:

• Mortgage or rent
• Bills
• Food
• Fuel
• Savings
• Holidays
• Retirement savings (pension, super, 401k)

Let's say you need £40,000 / $50,000 / $75,000 AUD take-home per year to live the way you want. That's your floor. Everything you charge has to work backwards from that number.

Step 2: Add Your Business Costs

Now add up everything it costs to run your business each year:

• Van/truck costs: finance, fuel, insurance, maintenance, registration
• Tools and equipment: replacements and new purchases
• Insurance: public liability and professional indemnity
• Accountancy fees
• Phone and software subscriptions
• Work clothing and PPE
• Marketing and advertising
• Trade body memberships
• Training and certifications
• Consumables: fixings, sundries, and materials not charged to individual jobs

For most sole traders in the trades, annual business costs fall somewhere between £8,000-£25,000 / $10,000-$30,000 / $15,000-$45,000 AUD depending on the trade, the vehicle situation, and whether you're carrying employees or subcontractors.

Let's say your business costs are £15,000 / $18,000 / $27,000 AUD per year.

Step 3: Factor in Tax

As a self-employed person, you'll pay income tax and additional contributions depending on where you are. In the UK, that's National Insurance. In Australia, you'll need to account for GST and superannuation. In the US, it's self-employment tax (Social Security and Medicare). The exact amount depends on your earnings, but as a rough guide, plan for 25-30% of your profit going to your tax authority.

So if you need £40,000 / $50,000 / $75,000 AUD take-home and 30% goes to tax, you need to earn around £57,000 / $71,500 / $107,000 AUD before tax to end up with your target in your pocket.

Add your business costs and you need to turn over roughly £72,000 / $89,500 / $134,000 AUD per year from your work.

Step 4: Work Out Your Billable Days

You don't work 365 days a year. You don't even work 260 (52 weeks x 5 days). Once you take out weekends, holidays, public holidays, sick days, and time spent on admin, quoting, marketing, and chasing invoices, most self-employed tradespeople have somewhere between 200 and 230 billable days per year.

Billable days means days you're actually on a job earning money. The other days are still "work" (quoting, doing accounts, buying materials) but nobody's paying you for them.

Let's be conservative and say 210 billable days.

Step 5: Calculate Your Day Rate

Now the math is simple. Take your total annual revenue target and divide by your billable days.

£72,000 ÷ 210 = £343/day | $89,500 ÷ 210 = $426/day | $134,000 ÷ 210 = $638 AUD/day

That's what you'd need to charge to cover your costs, pay your tax, and hit your take-home target.

Of course, this is a minimum. If you want to grow your business, build savings, or invest in better equipment, you'd need to charge more. And if the market supports it, you should.

How This Translates to Quoting Jobs

Your day rate is your baseline, but you won't always quote by the day. For many jobs, you'll quote a fixed price based on how long you think the work will take plus materials.

If a job will take two days and you need £250 / $300 / $450 AUD in materials, your quote would be:

(2 x day rate) + materials = total

UK example: (2 x £343) + £250 = £936 US example: (2 x $426) + $300 = $1,152 AUS example: (2 x $638) + $450 = $1,726 AUD

You might round up or adjust based on the specifics, but the day rate gives you a rational starting point rather than just guessing.

What about hourly work?

For emergency callouts and small repairs, divide your day rate by the number of hours you work in a day. If you work eight-hour days, that gives you roughly £43 / $53 / $80 AUD per hour.

Most tradespeople round up for hourly work because short jobs are less efficient. You've still got travel time, setup, and packing up. Charging £50-60 / $65-75 / $90-110 AUD per hour for a two-hour job is not unreasonable when you factor in the full time cost.

Adjusting for Your Market

Once you've got your baseline rate, sense-check it against your local market.

If your calculated rate is above what others charge, you've either got higher costs than average or you need to be positioned as a premium option. That's fine, but it means your quotes, your communication, and your work need to reflect that.

If your calculated rate is below what others charge, good. You've got margin. Don't drop your prices just because you can. That extra margin is your rainy day fund, your holiday money, and your future.

Geography matters a lot. Rates in major cities are significantly higher than in rural areas. A plumber in central London might charge £350+, in Sydney $700+ AUD, in New York $500+ per day, while the same plumber in a small town could charge half that. Neither is wrong. They're operating in different markets with different costs of living.

Don't Forget: Price Lists Save You Time

Once you've worked out your rates, building a price list for your common jobs is a huge time saver. If you know that a standard bathroom tile job costs you X in labour and Y in materials, you can quote it instantly without working from scratch every time.

With Priced, you can save your price list in the app. When you describe a new job (whether you type it, photograph your notes, or use voice-to-quote) the AI matches your job description to your saved prices and fills in the costs automatically. So once you've done the hard work of pricing things once, every future quote for similar work takes seconds.

When to Raise Your Prices

Here are some signs your prices are too low:

• You're fully booked more than two to three weeks out
• You're winning every single quote you send
• You haven't raised your rates in over a year

A healthy win rate is around 30-50% of quotes sent. If you're winning 80%+, raise your prices. If you're winning less than 20%, something else might be off: your pricing, your communication, or how quickly you're getting quotes out.

Review your rates at least once a year. Costs go up (fuel, insurance, materials), and your experience increases. Your prices should keep pace.

The Bottom Line

Pricing isn't guesswork. It's math. Work out what you need to earn, add your costs, factor in tax, divide by your billable days, and you've got a rational, defensible day rate. From there, you can quote any job with confidence, knowing that every price you give is grounded in what you actually need to charge, not what you think the customer wants to hear.

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Priced is an AI-powered quoting app built for tradespeople. Describe the job, and AI writes a professional quote ready to send in seconds. Try it free at getpriced.app.