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You've basically got three main ways to sell your time: day rate, fixed price and cost-plus. Each one shifts risk between you and the client -- that's the bit that really matters.
1. Day rate / time & materials
What it is
You charge for the time actually spent (day rate or hourly) plus materials at cost or cost + markup. Client covers however long it really takes and whatever materials actually cost.
When it works well
- Scope is unclear or there are big unknowns (repairs, investigations, strip-outs, "see what we find").
- You're working under a main contractor who understands time & materials and can keep an eye on hours.
Who holds the risk
- Client carries most of the cost overrun risk -- more hours or dearer materials = they pay more.
- You carry the risk of looking slow or disorganised if you can't justify your time.
Pros for you
- You're not gambling on how long it will take -- you get paid for what you actually do.
- Less pressure to cut corners to stay inside a fixed lump sum.
Cons for you
- Domestic clients often hate the uncertainty -- they want to know "how much", not "we'll see".
- You can look expensive if you don't manage expectations and communicate progress.
2. Fixed price / lump sum
What it is
You quote a single fixed price for a clearly defined scope, and you stick to it unless the scope changes.
When it works well
- Scope and drawings are pretty clear and unlikely to move much (straightforward extensions, refurbs with good info).
- You know the type of work inside out, so your allowances are usually on the money.
Who holds the risk
- You carry most of the cost overrun and productivity risk -- if it takes longer or costs more than you priced, your margin gets chewed up.
- Client gets cost certainty -- as long as they don't change their mind.
Pros for you
- Easier to sell to homeowners -- one number they can compare.
- If you price well and run efficiently, you can make a very tidy margin.
Cons for you
- Mis-priced jobs, conditions or material spikes come out of your pocket if you haven't protected yourself in your quote/contract (see 8.5 and 8.14).
- You'll spend more time on estimating and breaking down costs properly to avoid nasty surprises.
3. Cost-plus
What it is
Client pays the actual cost of labour, materials and other agreed costs, plus a fee for you -- usually either:
- A fixed fee, or
- A percentage of the costs (often somewhere around 5-20% in UK practice).
So you're reimbursed for what you genuinely spend, and your profit is agreed separately.
When it works well
- Scope is evolving or complex -- high risk of changes where a lump sum would be a guess.
- Client is fairly savvy (commercial/building experience) and wants flexibility and quality over rock-bottom price.
Who holds the risk
- Client carries most of the cost risk -- they pay actual costs, so if things go up, they pay more.
- You carry the risk of keeping trust -- you must be transparent, otherwise they'll think it's a blank cheque.
Pros for you
- Much lower risk of losing money due to under-pricing or material jumps -- you're reimbursed plus your fee.
- Lets you focus on doing a good job instead of cutting corners to protect a fixed lump sum.
Cons for you
- Needs good records (time sheets, invoices, clear breakdowns) and transparent communication.
- Many domestic clients don't trust it unless they know you well.
4. Who carries which risks (quick view)
| Risk | Day rate / T&M | Fixed price | Cost-plus |
|---|---|---|---|
| Cost overruns | Mostly client | Mostly you | Mostly client |
| Material price increases | Mostly client | Mostly you | Mostly client (reimbursed) |
| Slow productivity | Mostly client | Mostly you | Mostly client |
| Scope creep (client changes) | Client pays more but rows likely if not agreed properly | You suffer if you don't treat as variation | Client pays, if within agreed rules |
| Admin load | Medium | High (estimating, variations) | High (tracking and reporting) |
5. Simple rules of thumb for small builders
Use this as a quick steer:
Fixed price
Default for clear domestic jobs: extensions, kitchens, bathrooms, where you can define the scope properly. Build in sensible contingency and be strict about variations.
Day rate / T&M
Good for small, unknown jobs: fault-finding, repair work, small jobs where opening up may change everything. Explain the rate, give a rough range, and update the client daily or weekly.
Cost-plus
Good for larger or messy refurbs with changing scope and a switched-on client (often commercial or repeat customers). Only use if you're ready to be transparent on costs and keep tidy records.
As you grow, you'll probably end up using a mix: fixed price for most domestic work, day rate for investigative bits, and cost-plus or hybrid deals with commercial clients who understand how risk is being shared.
6. Common mistakes
- Using fixed price on jobs with massive unknowns -- strip-outs, damp investigations, old buildings with no drawings. You're gambling.
- Day rate with no rough estimate -- domestic clients panic when there's no ceiling. Always give a range ("I'd expect 2-3 days but it depends on what we find").
- Cost-plus with no agreed rules -- if you don't define what counts as a reimbursable cost and how your fee works, arguments are inevitable.
- Not adjusting your approach per job -- one pricing model doesn't fit everything. Match the model to the risk.
- Forgetting to protect yourself on fixed price -- no exclusions, no variation process, no materials price clause. See 8.5.
7. Who to contact
- RICS -- guidance on pricing and cost management in construction: rics.org (free guidance articles)
- CIOB -- Code of Estimating Practice and related resources: ciob.org
- FMB -- practical guides on quoting and pricing for small builders: fmb.org.uk
- Your accountant -- to understand how each pricing model affects your tax position and cashflow
8. Related guides on this site
- 8.5 Writing quotes that protect you
- 8.14 Dealing with price increases on materials mid-job
- 8.6 Terms and conditions template -- domestic work
- 8.7 Terms and conditions template -- commercial subcontracting
- 9.13 Scope creep -- client keeps adding work and expects it for free
- 1.14 Cashflow basics
- S16 Writing your first quote -- what to include so you don't get burned
Frequently asked questions
What should I charge as a builder per day?
In 2026, day rates for general builders in the UK typically range from £180-£280 outside London and £250-£400+ in London and the South East. These are rates for experienced tradespeople -- if you're just starting out, you'll likely be at the lower end. Your rate needs to cover not just your time, but your van, tools, insurance, pension, holiday, sick days, training and tax.
Don't pluck a number out of thin air. Work out your actual costs (see below), add your desired profit, and divide by your billable days. Most self-employed builders work around 220-230 days a year after holidays, admin days and weather. If you're consistently busy, your rate is either right or too low -- never too high.
How do I calculate my day rate?
Add up everything your business costs you in a year: van (lease/finance, fuel, insurance, maintenance), tools and equipment, public liability and other insurance, accountancy fees, phone, materials you supply, CSCS/training, clothing and PPE, pension contributions. Then add the salary you want to take home after tax, plus your tax and NI liability. Divide the total by the number of days you'll actually work and bill for (realistically 200-230 days).
For example: if your total costs are £15,000/year and you want to take home £40,000 after tax (roughly £50,000 gross), your annual target is £65,000. Divided by 220 working days = £295/day. That's your minimum. If you're quoting fixed-price jobs, you still need to know your day rate to price accurately -- otherwise you're guessing.
What is a good day rate for a plumber/electrician/carpenter?
In 2026, typical self-employed day rates are: plumbers £200-£350, electricians £200-£350, carpenters/joiners £180-£300, bricklayers £200-£320, plasterers £200-£300, roofers £200-£350. London and the South East add 20-40% on top. Specialist skills (gas work, renewable installations, heritage carpentry) command higher rates.
These are gross day rates before tax, not take-home pay. They should cover all your overheads. If you're charging £150/day and wondering why you're skint, it's because your rate isn't covering your true costs. Don't race to the bottom -- cheap tradespeople attract the worst customers and the worst jobs.
Should I charge day rate or fixed price?
It depends on the job. Day rate works well for jobs with uncertain scope -- maintenance work, fault-finding, renovation where you don't know what's behind the wall. Fixed price works better for defined jobs -- a bathroom refit, a kitchen installation, a loft conversion -- where you can measure, price and control the scope.
Most experienced tradespeople prefer fixed price for bigger jobs because it rewards speed and efficiency -- if you price right and work smart, you earn more per hour than day rate. But fixed price carries risk: if you underquote, you eat the loss. Start with day rate while you learn how long things take, then move to fixed price as your estimating gets sharper. Never do a fixed-price job without a written scope of work.
Frequently asked questions
What should I charge as a builder per day?
In 2026, day rates for general builders in the UK typically range from £180-£280 outside London and £250-£400+ in London and the South East. These are rates for experienced tradespeople -- if you're just starting out, you'll likely be at the lower end. Your rate needs to cover not just your time, but your van, tools, insurance, pension, holiday, sick days, training and tax.
Don't pluck a number out of thin air. Work out your actual costs (see below), add your desired profit, and divide by your billable days. Most self-employed builders work around 220-230 days a year after holidays, admin days and weather. If you're consistently busy, your rate is either right or too low -- never too high.
How do I calculate my day rate?
Add up everything your business costs you in a year: van (lease/finance, fuel, insurance, maintenance), tools and equipment, public liability and other insurance, accountancy fees, phone, materials you supply, CSCS/training, clothing and PPE, pension contributions. Then add the salary you want to take home after tax, plus your tax and NI liability. Divide the total by the number of days you'll actually work and bill for (realistically 200-230 days).
For example: if your total costs are £15,000/year and you want to take home £40,000 after tax (roughly £50,000 gross), your annual target is £65,000. Divided by 220 working days = £295/day. That's your minimum. If you're quoting fixed-price jobs, you still need to know your day rate to price accurately -- otherwise you're guessing.
What is a good day rate for a plumber/electrician/carpenter?
In 2026, typical self-employed day rates are: plumbers £200-£350, electricians £200-£350, carpenters/joiners £180-£300, bricklayers £200-£320, plasterers £200-£300, roofers £200-£350. London and the South East add 20-40% on top. Specialist skills (gas work, renewable installations, heritage carpentry) command higher rates.
These are gross day rates before tax, not take-home pay. They should cover all your overheads. If you're charging £150/day and wondering why you're skint, it's because your rate isn't covering your true costs. Don't race to the bottom -- cheap tradespeople attract the worst customers and the worst jobs.
Should I charge day rate or fixed price?
It depends on the job. Day rate works well for jobs with uncertain scope -- maintenance work, fault-finding, renovation where you don't know what's behind the wall. Fixed price works better for defined jobs -- a bathroom refit, a kitchen installation, a loft conversion -- where you can measure, price and control the scope.
Most experienced tradespeople prefer fixed price for bigger jobs because it rewards speed and efficiency -- if you price right and work smart, you earn more per hour than day rate. But fixed price carries risk: if you underquote, you eat the loss. Start with day rate while you learn how long things take, then move to fixed price as your estimating gets sharper. Never do a fixed-price job without a written scope of work.
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