Electrician job pricing: build a quote from your real costs

Fictional example J-041. A survey confirms the proposed circuit and route are suitable for the agreed work. The quote includes two double sockets in agreed positions, installation, testing, paperwork and the specified making good. Decoration and any further remedial work are excluded. There are two planned visits because access requires a return. This is a costing example, not an installation method.

The £30 is an internal labour cost chosen for this example; it is not the customer’s charge-out rate. Setup is included in the four installation hours. Do not count it again. The overhead covers business costs outside these direct job costs; the worksheet names the allocation basis so you can check for double counting.

Choose an explicit profit target. Here, a 25% margin on the selling price gives £375 ÷ 0.75 = £500 ex-VAT. The allowance leaves £125 above estimated costs. For this example’s VAT-registered business and standard-rated work, VAT is £100 and the customer total is £600. A business that is not VAT registered uses its actual unrecoverable costs and does not add output VAT.

A 25% markup on the same £375 cost gives £468.75. The £93.75 difference is 20% of that selling price. A 25% margin gives £500 instead: £125 is 25% of £500. These are different pricing decisions.

• Markup: profit divided by cost.
• Margin: profit divided by selling price.

Use the materials markup calculator when adding a percentage to supplier cost, and the profit margin calculator when setting a share of the selling price. The charge-out-rate calculator helps with your own billable-hours basis. Our example’s 25% is a chosen illustration, not a recommended universal margin.

In this fictional job, installation takes 4.5 hours rather than four and the supplier collection takes one hour rather than half an hour. Actual materials cost £95; parking/disposal stays £15. Total time is 7.5 hours, so direct labour is £225 and the same £10-per-hour overhead allocation becomes £75.

The agreed £500 ex-VAT selling price still stands. Actual job profit after the listed costs is £90, or 18% of £500. The lesson is to allow more installation and collection time next time; the lost allowance does not become an extra invoice line.

Separately, the customer requests a third socket. In this example the trader prices and gets approval for variation V-041: £100 ex-VAT extra selling price, £70 actual extra cost. Record that approval before treating it as agreed. Original scope plus the addition produces £600 ex-VAT revenue and £480 actual cost: £120 job profit after the listed costs, a 20% margin. At this example’s standard VAT rate the final customer total is £720. A requested or declined addition contributes no agreed revenue.

Keep the original quote, approved addition and actual cost evidence together. The quote-to-actual worksheet below records the reasons, not just a final percentage.

Customer price guides describe what someone may be charged; they do not establish your labour cost, billable hours or margin. Use our electrician pricing reference guide for rate-list and download intent and the linked Checkatrade cost guides for the type of work being compared.

For your own quote, check the actual scope, materials specification, access and number of visits. A consumer unit replacement, EICR or extra socket can require different work at different properties. A headline market price is a cross-check after building the job cost, not a replacement for the calculation.

Use your own records rather than copying another electrician's rate. Start with annual business overheads and the pre-tax earnings or profit target you need the business to support, then divide by realistic billable hours. An after-tax take-home target is a different calculation. Keep job-specific materials and subcontract costs separate from overheads so they are not counted twice.

• Annual basis: period ___; vehicle, tools, insurance, membership, accountancy, software and other overheads ___; pre-tax target ___.
• Available hours: working time ___; leave ___; travel ___; surveys/admin ___; other non-billable time ___; resulting billable hours ___.
• Rate basis: overhead and target allocation per billable hour ___; job-specific costs added separately ___; VAT treatment ___; checked date ___.

For each job, compare the scope you priced with the work and costs actually recorded. Keep selling price separate from internal cost.

Quote-to-actual worksheet

• Version: private job reference ___; scope revision ___; quote reference/revision ___; accepted date and evidence ___.
• Scope basis: inclusions ___; exclusions ___; unconfirmed conditions and assessment needed ___.
• Materials: item/unit ___; allowed quantity and waste ___; actual quantity/cost and receipt ___; returns or unused stock ___.
• Labour: allowed time/cost ___; actual time/cost ___; travel/access ___; making good ___; subcontract contribution and invoice ___.
• Change: requested work ___; variation reference ___; separately agreed price/time and evidence ___; pending or declined work ___.
• Reconcile: agreed selling price including accepted changes ___; actual job cost on the same VAT basis ___; difference and reason ___; lesson for the next quote ___.

A requested change is not an accepted addition to the selling price. Keep it pending until separately agreed. Actual costs do not rewrite an already agreed price. Use the scope template, materials take-off sheet and fictional variation example together. The travel coverage worksheet owns the separate decision about which areas and services to offer.

Use the supplier’s actual selling unit, price date and VAT basis. Add quantities and waste from the priced take-off, then count collection, delivery and handling time once. Keep returns and unused stock in the actual-cost record.

If you sell materials with a markup, use the cost and intended markup in the materials calculator. If the customer supplies an item, confirm its specification and availability and price the work you will do. Check who buys and replaces the goods before agreeing the scope.

There is no universal materials percentage that covers every job. Use your own sourcing time, breakage/returns history and agreed responsibilities. Do not count the same collection allowance in labour, materials handling and overhead.

Use the same VAT basis for costs and selling price. VAT registration is generally required when taxable turnover exceeds £90,000 over the last 12 months, or when you expect it to exceed £90,000 in the next 30 days. Voluntary registration is possible below that threshold.

The standard rate is 20%, but the rate depends on the work. Confirm the applicable rate before quoting. VAT-registered businesses separate recoverable input VAT from cost and add the applicable output VAT to the selling price. A business that is not registered does not charge output VAT and includes VAT it cannot recover in its costs.

State the customer total and VAT treatment clearly. The worked example above uses a VAT-registered business doing standard-rated work; those assumptions do not set the treatment of every electrical job.

After payment, compare the original scope with actual time and receipts. Name the reason for each difference: underestimated preparation, an extra collection, delayed access, a changed specification or separately approved additional work.

Update the next estimate where your records justify it. If your overhead or billable hours have changed, recalculate your rate basis. If one recurring job takes longer than you allowed, change that job’s allowance. Do not choose a blanket percentage increase because a guide suggests one.

For the customer, prepare one clear scoped quote from your own rates. See quoting in Tradehand; the Assistant is available on Free, with automation and more usage on paid plans. Keep the accepted quote and any later addition as separate decisions.