How to Price a Job as a Tradie in NZ (Cost It First)
- Your true hourly rate must account for unbillable hours or you’ll underprice every job without realizing it.
- Cost each job fully before adding profit margin, separating markup on cost from margin on price correctly.
- Customers rarely leave over quality, they leave uneasy when the final price doesn’t match the first quote.
Ask ten tradies how they priced their last job and most will describe a feeling. It felt like a $2,500 job. The last one like it was about that. The customer looked like they would pay it. That is not pricing, it is guessing with confidence, and it works right up until the month the guesses all land short at once.
Pricing a job properly is not complicated. It has an order, and the order matters.
Start with what an hour costs you
Before you can price anything, you need to know what one hour of your time has to earn. Add up the year’s overheads: vehicle, insurance, tools, phone, software, accountant, advertising, any rent. Add the wage you want to pay yourself. Divide by the hours you can actually bill in a year.
That last number is where most people go wrong. A sole trader works 45 hours a week and bills 28 of them; the rest is quoting, driving, buying materials, chasing payment and admin. Over 46 working weeks that is about 1,300 billable hours, not 2,000. Divide $130,000 of overheads and wage by 1,300 and the break-even rate is $100 an hour before any profit. Divide it by 2,000 and you get $65, and you will wonder all year why there is never anything left.
The hourly rate calculator in our resource library does this sum from your own figures.
Cost the job line by line
With the hourly figure in hand, cost the job. Not the price: the cost.
Labour hours, honestly estimated, including the apprentice’s hours at the apprentice’s cost. Travel time, because the van does not drive itself. Materials at what you pay, not what you charge. Subcontractors. Plant and hire. Consumables, which every job eats and almost nobody costs: fixings, sealant, fuel, blades, tape. Disposal: skip, dump fees. Permits and inspection fees where they apply.
Then recover overhead. Every labour hour on the job carries its share of the year’s fixed costs, so multiply the labour hours by the overhead-per-hour figure from the step above and add it. A job with more hours carries more of your insurance and your van. That is the point.
Now put margin on top
Only now does price enter the picture. Decide the margin you want on the job, and apply it as a markup on cost. The two words are not interchangeable: a 35% markup on cost is a 25.9% margin on price, and if you want a 30% margin you need a 42.9% markup. Mark up materials and subcontractors at a lower rate if you want to stay competitive on big-ticket supply, but mark them up. Passing them through at cost means you carry the risk of a price rise and the admin of ordering them for nothing.
Add GST last.
Why it matters more than it looks
Across 20,286 publicly posted reviews of NZ electricians, plumbers and painters, quote accuracy is praised in only 6.7% of positive plumber reviews, 6.8% for electricians and 11.1% for painters. Customers rate quality higher than value for every trade: the gap is 2.7 points for plumbers and 1.9 points for electricians. People love the work and feel slightly less good about the price, and that feeling forms when the final number does not match the first one.
A job that was undercosted gets finished anyway. The tradie either eats the difference or sends a bigger invoice, and both outcomes show up in the reviews. Jobs are rarely undercut by a competitor. They are undercosted by the person quoting.
Jobs are rarely undercut by a competitor. They are undercosted by the person quoting.
Write the quote from the costing, not the other way round
The costing sheet is for you. The quote is for the customer, and it should carry the price, the scope in plain language, the exclusions, the validity period and how variations will be handled. Keep the two documents together so that when the job is finished you can compare actual hours and materials against what you quoted. The gap between the two is the most useful number in your business, because it tells you exactly what to change next time.
A sheet that does the arithmetic
The job costing and markup sheet in our resource library is an Excel workbook with the hourly rate sheet, a line-by-line costing with overhead recovery per labour hour, markup you can set per line, and a margin check that turns red under 20%. It comes with a one-page estimate template to copy the price into. Free, no sign-up.
Price from cost, every time, and the quiet months stop being a mystery.
What to do on Monday
- Calculate your true hourly rate using last year’s overheads divided by actual billable hours, not assumed hours.
- Cost your next quote line by line before setting any price, including consumables and disposal fees.
- Compare actual job costs against quoted costs after each job to spot where estimates go wrong.
