# 15.6, The money reality: what you'll actually earn in years 1–3
You can earn decent money self‑employed in years 1–3, but the raw turnover headlines are miles away from what ends up in your pocket.
1. Realistic income ranges in years 1–3
Hudson Contract (biggest CIS payroll in UK construction) publishes regular pay trends for self‑employed trades. They're not "newbie only", but they show what a typical established subbie turns over in a solid week.
- Across trades, average self‑employed earnings sit around £950–£1,050 per week before your own costs.
- Some trades regularly hit higher: recent data showed plumbing at ~£1,159/week, shopfitting ~£1,169/week, and specialist trades around £979/week at record highs.
Turn that into a rough, honest glide path for a new sole trader:
Year 1
- Realistic weekly turnover: maybe £600–£900/week on average once you factor in quiet weeks, bad weather and time off.
- Annualised turnover: roughly £30k–£45k.
Year 2
- If you build a decent client base, you might move closer to the Hudson average more often, say £800–£1,000/week.
- Annualised turnover: £40k–£52k.
Year 3
- If you're busy and not underpricing, you can have many weeks in the £950–£1,100+ range like the benchmark, especially in stronger trades.
- Annualised turnover: £50k–£60k+ if you keep your foot down and don't lose too many weeks.
By trade, using those Hudson trends as a sanity check:
- Plumbing/heating – often at the upper end (good domestic demand, emergency work).
- Mechanical & electrical / shopfitting / specialist trades – can be high, similar to or above plumbing.
- Roofing, bricklaying, scaffolding – strong but more weather‑dependent and boom/bust by region.
Key point: those numbers are gross payments, not what you personally "earn" after everything.
2. What percentage disappears in costs?
There's no single official percentage, but when you combine worked examples from trade accountants/insurers with ONS‑based figures, you get a consistent picture.
Example from a domestic electrician case study:
- Turnover: £52,500
- Materials and consumables: £10,500 (about 20% of turnover)
- Overheads (vehicle, tools, insurance, marketing, admin): £11,800 (~22–23% of turnover)
- Tax and NI on profits: £10,000–£12,000 (~19–23%)
That's roughly:
- Materials/consumables: 15–25% of turnover (domestic work tends to sit around 20%).
- Overheads (van, tools, insurance, marketing, accountant, admin): 20–30% depending on how lean you are.
- Tax + NI on the profit left: another 15–25% depending on how much you're actually making.
Add it up, and a typical small self‑employed trade business sees something like:
- 50–60% of gross turnover gone in materials + overheads before tax.
- Then another ~15–25% of turnover equivalent gone in tax/NI on what's left.
- Your true take‑home (money you can actually spend) often ends up around 40–55% of your turnover, once everything is included and you're funding your own holidays and pension.
If you turn over £50k, don't be surprised if your personal spendable income ends up nearer £22–£28k once you've covered materials, running costs, tax and a bit of holiday.
3. ONS: self‑employed vs employed construction earnings
ONS doesn't give a perfect "net" comparison, but the pieces we do have are:
- Employee data (ASHE) shows median annual pay for key construction trades (PAYE) in the high‑20s to high‑30s, with electricians and plumbers higher than many other trades.
- Analysis of "mixed income" (what the self‑employed take home) shows that self‑employed income has historically grown slower than employee compensation overall, even though the number of self‑employed people went up.
- The ONS labour‑share work even notes that if you assume self‑employed people earn the same as employees, you overstate their income – in other words, on average, lots of self‑employed don't out‑earn employees once everything is factored in.
A fair summary:
The headline turnover for busy self‑employed trades can look higher than PAYE wages. The average self‑employed person's actual income isn't automatically higher than an employee's, and many sit similar or lower once volatility and costs are included.
4. costs that chew up your pay
These are the ones that don't feel like "costs" when you set your day rate, but they absolutely are.
Unpaid time
- Quoting, site visits that don't turn into work, supply runs, paperwork, chasing money, snagging.
- Unless you build them into your prices, they quietly slash your real hourly rate.
Holidays and sick days
- No employer funding any of this. If you want 4–5 weeks off a year, you must price that into your day rate yourself.
- Example: if you only want to work 46 chargeable weeks but you priced as if you'd work 52, you've just cut your own effective rate by more than 10%.
Van and fuel creep
- It's not just insurance and finance/lease – it's tyres, servicing, surprise repairs, breakdown cover and rising fuel costs.
- Trade income breakdowns regularly show vehicle costs alone at several thousand a year, often £3k–£5k for a busy domestic trade.
Tools and replacements
- You're now funding every cordless kit, every lost/knackered tool, PAT testing where needed, and bigger purchases like scaffold towers or test equipment.
- In the electrician example, tools and kit were £1,800/year. Many trades will be similar once you factor in big bits of kit over time.
Insurance and compliance
- Public liability, possibly professional indemnity, tools cover, maybe legal expenses – plus scheme fees (e.g. NICEIC, Gas Safe, other trade bodies).
- The electrician case study had £2,200/year on insurance and compliance alone.
Marketing and lead fees
- Checkatrade subs, pay‑per‑lead sites, website, ads – these feel "optional" but in year 1–2 they're often necessary to keep work coming.
- That same electrician example had £2,400/year on marketing.
Accountant and software
- Even a basic accountant might be £400–£800/year; add accounting software and other subscriptions and it quietly adds another chunk.
None of these are individually scary, but together they mean:
A "£1,000 week" is not £1,000 of wages. By the time you strip out materials, overheads, and tax, it can feel a lot like a "£500–£600 week" in real spendable cash, especially in year one while you're still buying kit and making mistakes.
What to do next
- Read: 15.4 – Your first year self-employed · what actually happens
- Read: 14.2 – How to price your first job without underselling yourself (the day rate formula that accounts for all of this)
- Read: 14.10 – Cashflow and pricing · why a profitable job can still break you
- Read: 15.8 – Working for a company vs working for yourself · year by year
- Download: First Job Pricing Worksheet (builds your rate from real costs, not guesswork)
- Download: Cashflow forecast – 12 week template
- Use: Late Payment Calculator · to see the real cost of slow payers on top of everything else
Sources (UK)
- Hudson Contract – weekly self-employed construction pay benchmarking (CIS operatives); plumbing ~£1,159/week, shopfitting ~£1,169/week, specialist trades ~£979/week at recent highs.
- ONS Annual Survey of Hours and Earnings (ASHE) – median employee earnings by trade SOC code.
- ONS labour share and mixed income analysis – self-employed income growth vs employee compensation; overstatement risk when assuming parity.
- Self-employed electrician case study (ONS-based) – detailed turnover-to-take-home breakdown: materials 20%, overheads 22%, tax/NI 19–23%.
- Trade accountancy and insurance commentary – typical overhead ratios, vehicle costs, insurance and compliance costs for small trade businesses.
- Institute for Fiscal Studies (IFS) – sole trader survival and income volatility data.
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