Guides · Updated 2026-10-15

How much should a tradesperson charge per hour? (UK)

Most tradespeople set their rate by asking around and charging a bit less than the competition. That tells you what the market will bear, but not whether the rate actually pays you. This guide works from the other end: what you need to earn, what the business costs, and how many hours you can really charge for. Tax figures are from GOV.UK for the 2026 to 2027 tax year, checked on 15 October 2026.

We don't publish "average rates" for each trade: they vary too much by region, job type and demand, and most published figures aren't sourced. Use the method below for your floor, then compare it with what local firms charge.

Step 1: decide what you want to earn

Start with the profit you want from the business in a year, before tax. That's what pays you; income tax and National Insurance come out of it (see step 5).

Step 2: add up your yearly business costs

List everything the business pays for in a year, whether or not you could charge it to a particular job: van lease or finance, fuel, insurance, tools and repairs, phone, software, accountant, trade scheme fees, advertising, workwear. If you recharge materials to customers at cost or with a markup, leave those out here and price them on each quote. Our van costs guide helps with the biggest one.

Step 3: count the hours you can actually bill

This is where most rates go wrong. You won't bill 52 weeks a year, or 5 full days every week. Take off:

• holidays and bank holidays
• sick days and quiet weeks
• time spent quoting, travelling between jobs, collecting materials and doing paperwork

If you employ people, remember they're entitled to 5.6 weeks' paid holiday a year (GOV.UK), and travel between jobs counts as working time for minimum wage purposes (GOV.UK). Your own time works the same way: it still costs you.

Step 4: divide

Day rate = (target income + yearly costs) ÷ billable days. Hourly rate = day rate ÷ billable hours in a day.

Worked example. A sole trader wants £40,000 profit and has £12,000 of yearly costs. They work 46 weeks a year, 5 days a week, and can bill 75% of those days: 46 × 5 × 0.75 = 172.5 billable days.

• Day rate: £52,000 ÷ 172.5 = £301.45
• Hourly rate at 8 billable hours a day: £37.68

These numbers are an illustration, not a recommendation. Put your own figures into the day-rate calculator, which does the same sum in your browser.

Step 5: check what you keep after tax

On £40,000 of profit in 2026 to 2027 in England, Wales or Northern Ireland, with the standard £12,570 Personal Allowance:

• Income Tax: 20% of £27,430 = £5,486 (GOV.UK)
• Class 4 National Insurance: 6% of £27,430 = £1,645.80 (GOV.UK)
• Left after tax and National Insurance: about £32,868

Income Tax bands are different in Scotland. If the take-home figure is too low, raise the target in step 1 and work it through again. Set aside tax as you go: put a share of every payment into a separate account.

Hourly, day rate or fixed price?

• Hourly suits small or unpredictable jobs, but customers can't budget and you earn less by working faster. Many trades add a minimum charge or call-out fee for short visits.
• Day rate suits work for contractors and longer jobs where the scope changes.
• Fixed price suits jobs you can scope well. Build your hourly rate into the estimate, add materials, and allow for the unexpected. See how to write a quote that wins and the quote and VAT calculator.

If you're VAT-registered, work out your rate before VAT and add VAT on top. See should I register for VAT? if you're near the £90,000 threshold.

Cut the unbilled hours

The quickest way to raise your effective hourly rate is to bill more of the hours you already work. Quoting and invoicing apps cut paperwork time (AI quoting tools for builders), and an AI receptionist can take calls while you're on a job.

Once you have your rate, turn it into a price with how to price a job.

FAQ

How do I work out my hourly rate as a tradesperson?

Add the profit you want to your yearly business costs, divide by the days you can actually bill, then divide by your billable hours a day. The day-rate calculator does the sum.

Should my hourly rate include materials?

Usually not. Price materials separately on each quote, with any markup, so your labour rate stays the same whatever the job needs.

How many days a year can I bill?

It depends on your work, but fewer than you think once holidays, quiet spells, quoting, travel and admin are taken off. Track it for a few months to get your own figure.

Does my rate need to cover tax?

Yes. Income Tax and Class 4 National Insurance come out of your profit, so set your target income high enough to leave what you need after tax.

Is this financial advice?

No. It's a method and a worked example, using GOV.UK tax rates for 2026 to 2027. An accountant can check your figures.