Twenty to eight, and the question arrives before the job does
The text comes from a number you half recognise, forwarded by a customer from two summers ago. Four words: what is your day rate. No address, no photograph, no clue whether this is a morning of skirting or five weeks of second fix in a house with no floor. And you will answer it inside a minute, because a pause reads as a negotiation and because the number has not moved since the year the van was new.
That is a peculiar thing to be doing, and it is worth noticing how peculiar. Every other price you write gets assembled: the work is described, then measured, then priced, then totalled, in that order, and the customer sees the last line of it. The day rate is the only price in the trade quoted before anybody has described the work. It is also the only one that travels. A fixed price for a bathroom dies with the bathroom, seen by one household and forgotten; a day rate gets repeated at a school gate, set beside the electrician's, remembered a year later and read back to you when you try to move it.
What follows is not the annual arithmetic. What the firm costs over twelve months, what has to sit on top of a wage to make it the cost of employing somebody, and which of the two honest routes you use to recover overhead — never both at once — are worked through on this site's guide to pricing your own work, and none of it is reassembled here. This page picks up one step later, at the point where a year of cost has to become a single number sayable in a text message. Its subject is the day itself: what one is, how many of them a year actually contains that anybody will buy, and what happens to a firm when a sound cost sits over a fictional count.
Tuesday does not keep
An hour is a unit of measurement. A day is a lump of stock with an expiry date on it, and the difference is the whole of this page. You can sell six hours of a Tuesday and there is nobody to sell the other two to, because nobody buys two hours eighteen miles away, and you cannot put the unsold half of Tuesday in the van and take it out again in November. A firm that prices by the day is running a perishable inventory of a couple of hundred items a year, every one of which rots at midnight whether or not anyone came to collect it.
Three mechanisms destroy days and none of them appears in anybody's accounts. Fragmentation: the call-out that takes ninety minutes and finishes the day anyway, because of the drive out, the drive back and the fact that nothing else was ever going to be booked around it. Tied days: first fix Monday, the screed goes down Tuesday, nobody can be back until Friday, so Wednesday and Thursday belong to no job at all and were nonetheless created by one. And geography, which decides whether two jobs fit in a day — they only ever do if the second is near the first, which means the radius you work in is not a marketing preference, it is the denominator of your rate.
Then there are the days nobody is standing behind you on. Statutory sick pay under Part XI of the Social Security Contributions and Benefits Act 1992 is a payment an employer makes to an employee, and there is no employer. Automatic enrolment under Part 1 of the Pensions Act 2008 puts its duties on employers in respect of jobholders, so nobody is enrolling you in anything; the American equivalents, the plans set out in IRS Publication 560, likewise have to be opened by the same person who funds them. Both are perfectly ordinary annual costs and both get left out of a rate, because they arrive as an absence rather than as an invoice. A rate that does not carry them is a rate built on an assumption that you will not catch flu and will not get old.
So the first exercise is not a price at all. It is a count, and it wants last year's diary rather than last year's bank statements. Sort every working day into what it actually turned out to be rather than what it was booked as, and total the categories. Most people who do this once are surprised twice: by how few whole sold days there were, and by how much larger the tied and fragmented piles are than the holiday everybody remembers taking.
One warning before the sorting starts, because it is the commonest way this count goes wrong. Measuring, quoting and the second visit to look at a loft are real labour with no invoice at the end of them, and the pricing guide is blunt that no document anywhere records them — they exist only if you count the hours yourself. So they come out of the sellable days, exactly as they come out of that guide's billable-hours divisor. What they must not also do is arrive in the numerator as a cost line of their own, because your own year of time is already sitting there and is already paying for the Thursday spent on somebody's landing with a tape. Take the day out once. Take it out twice — or sort a day that was half a call-out and half a quoting visit into both piles — and you have a rate that loses work for a reason nobody will ever explain to you.
| The kind of day | How it looks in the diary | What it earns, and what it costs |
|---|---|---|
| Whole sold day | One job, on site, start to finish, nothing else booked against it | The only kind of day a day rate is straightforwardly true for, and the only one worth counting as sellable |
| Fragmented day | Ninety minutes of work with a drive at each end and an afternoon with nowhere to go | A part-day invoiced against a whole day consumed. The shortfall is the entire reason a minimum charge exists |
| Tied day | Waiting on a screed, an inspection, a delivery or a trade that said Tuesday | Earns nothing, was created by a specific job, and stays invisible unless it is counted against that job rather than against the year |
| Selling day | Measuring, quoting, the second look at the loft, the follow-up call | Real labour that no invoice and no document ever captures, so it comes out of the sellable count — once, and never again as a separate cost line in the numerator |
| Yard and admin day | Invoicing, chasing, the van service, a ticket renewal, collecting a special order | Not sellable and not optional. The first thing to get squeezed when the diary fills, and the reason the paperwork happens on a Sunday |
| Day sold to another contractor | Their site, their programme, their skip, their foreman, their payment terms | A different product at the same number, which is what makes it a discount that never appeared on any document |
| Unsellable day | Holiday, illness, weather in the trades that have weather, a course that fell due | Nothing arrives to cover it, so the rate has to have carried it in advance or it was never carried at all |
What counts as a day, written down before anybody asks
A day rate quoted without a definition is not a price. It is the opening of a negotiation that will happen later, on site, while you are dirty and the customer is holding a mug. The questions are always the same handful and they are always asked after the fact. Does the day start when the van leaves or when the tools come out. Whether forty-five minutes of driving at each end sits inside it. What a half day is, and whether it is half the money. Whether the trip to the merchant for the fitting nobody could have known about is yours or theirs. Who is providing power, a toilet and somewhere to park a long wheelbase van on a street with a permit scheme.
The welfare half of that is not manners, it is duty. Schedule 2 to the Construction (Design and Management) Regulations 2015 sets out the minimum a construction site has to have — sanitary conveniences, washing facilities, drinking water, somewhere to change and somewhere to sit — and the American equivalent sits in OSHA 29 CFR 1926.51. On a small domestic job that is discharged by the householder's own bathroom and kettle, which works beautifully until the job where the bathroom is the job. Somebody is then paying for the alternative. The same fork applies to waste: whether the skip sits inside the day or on a line of its own is a decision, and if it is inside, it is a cost of the day and has to have been in the rate. Neither of those is worth arguing about on a Thursday for the price of ten minutes on the Monday.
Where the industry has already written a definition of a day, know that it is not describing your number. The RICS Definition of Prime Cost of Daywork carried out under a Building Contract prices labour at a prime cost and deliberately keeps overhead and profit outside it, as percentage additions stated separately; in civil engineering the CECA Schedules of Dayworks carried out incidental to Contract Work do the equivalent job. Quote your charge-out figure into a contract expecting prime cost and the percentages that follow are being applied to a number that already contains what they exist to add. How a daywork sheet is tested when the account is settled belongs to this site's final-account guide; the point that belongs here is narrower — establish which of the two kinds of number you are being asked for before you say one out loud.
Which leaves the fragmented day, and the minimum charge that answers it. Setting a minimum is arithmetic rather than aggression, and the arithmetic is one line: what does the day cost you when the ninety-minute job is the only thing in it. That is the floor, and it does not care how small the job was. A half day is genuinely half only when the other half is sold, so a half-day price at half the rate works on a street where you have three customers and quietly loses money everywhere else. Out-of-hours and emergency attendance have no published schedule behind them at all — nothing governs what a Sunday is worth — so the only defensible basis is the day it displaces and whatever the displacement is worth to the person asking.
- State the working day in hours, and say where it starts — at the property or at the yard — because a two-site day and a forty-mile day are different products being sold at the same number.
- Put travel inside the rate within a stated radius and chargeable beyond it, and write the radius down. A rate is only true for the area it was built for.
- Define the half day in hours, and say plainly whether it can be booked on its own or only alongside something else that day.
- Set the minimum: the smallest amount of money a visit generates, taken from what the day costs when that visit is the whole of it.
- List what the day contains and what it does not — hand tools, consumables to what value, hired plant, waste removal, parking and permits — each one in or out, in writing, before anybody is on site.
- Say what ends the day: whether hours beyond the stated ones are available at all, and at what rate, because a rate with no ceiling on it is a standing promise to work Saturdays at a Tuesday price.
Run it twice on the same Tuesday. First the honest invoice — the hours the work actually took, ninety minutes or two, at the hourly figure your day rate implies, crew of one. Then run it again at the full working day with everything else unchanged. The gap between the two totals is not hypothetical; it is what that call-out took off the week, and closing it is the entire job of a minimum charge. Where a second person travels with you, raise the crew size rather than doubling the hours: it is the day being consumed twice, not the work.
The total hours the job is expected to take, per worker.
The rate charged (or paid) per worker, per hour.
The number of workers billed at this hourly rate.
Total crew-hours
40 hours
Figures that depend on a rate wait for yours — this page does not assume one.
They open the calculator with your figures already in it
Labor Cost Calculator: 40 hours — shown in imperial, US market. The link sets both, so the result they see is the one on your screen.
What this calculation does not cover
- One rate is multiplied across every hour and every worker, so there is no tier for overtime or holiday premiums, night and weekend differentials, or a crew that pairs a licensed lead with an apprentice — a mixed-rate job has to be totalled in separate runs and added by hand.
- Crew size acts as a straight multiplier on the hours you entered, which assumes each additional worker stays productive for the full duration: the tasks that will not split across two pairs of hands, the time a crew loses coordinating, and the helper who is only on site for part of the week all leave the total untouched.
- Nothing distinguishes a wage you pay from a rate you are charged, because the same multiplication runs on either. A figure built from raw wages carries no payroll taxes, workers' compensation, insurance or benefits on top of it, while a contractor's quoted rate may already have overhead and profit buried inside — the answer looks identical in both cases.
- Only worked hours are priced. Travel and mobilization, setup and clean-up, tool or equipment hire, disposal, permits and materials all sit outside the figure, and no minimum charge is imposed either — an entry of half an hour returns half an hour of money on a job many trades would bill as a minimum visit.
- The hours you type are taken exactly as they stand, with no contingency for rework, weather, waiting on an inspection or scope that grows once the walls are open, and the rate is held flat for the whole span — a long program approaching the 2,000-hour entry ceiling is still priced at today's number, with no escalation partway through.
Divide by the days you can sell, not the days on the calendar
The division itself is one line. Everything the year has to produce, over the days you can genuinely sell. The numerator — what the firm costs and what your own time in it is worth — is the pricing guide's subject and is not rebuilt here. What this page insists on is the denominator, because it is the half people fill in from a calendar when the only honest source for it is a diary.
The sensitivity is worth seeing rather than believing. A numerator is fixed by things that arrive with dates on them; a denominator is an estimate about weather, other people's programmes and your own optimism. Move the denominator down by a tenth and the rate has to move up by about a ninth to stand still, which is more than the entire net margin most small firms run at. That is why an optimistic count of sellable days is a more expensive error than an optimistic price, and why the count, not the rate, is the thing to go back to when a busy year produces nothing.
One consequence changes the arithmetic without changing a single cost, and it is caused by the rate rather than by the work. Liability to register for VAT in the United Kingdom runs off the value of taxable supplies under Schedule 1 to the Value Added Tax Act 1994, with the tests and the current thresholds set out in HMRC VAT Notice 700/1 — and taxable supplies, for a firm that sells days, is nothing more complicated than the rate multiplied by the days sold. Raise the rate, sell the same number of days, and a line can be crossed that has nothing to do with how you work. To a business customer who recovers it, that is administration. To a householder who cannot, the same day either costs them more or earns you less, and which of those it is deserves to be a decision taken while the rate is being set rather than a discovery made the following spring.
Run this one on the year rather than on a job. The two cost fields are only two addends, so put twelve months of the firm's cost in one and twelve months of your own time in the other, and set the markup to what you want the year to return above both. Divide the price it hands back by the days you counted as genuinely sellable, and that quotient is the rate. Then, without touching the calculator, do the division a second time over a day count a tenth smaller — that second answer is the one to price at if you are honest about how last year went.
Your direct cost for materials on this job.
Your direct labor cost for this job (wages, not billed rate).
The percentage added on top of costs to cover overhead and profit.
Total price to charge
$9,600
- Cost subtotal
- $8,000
- Markup amount
- $1,600
- Gross margin on the price
- 16.67 %
They open the calculator with your figures already in it
Contractor Markup Calculator: 9,600 $ (total price to charge) — shown in imperial, US market. The link sets both, so the result they see is the one on your screen.
What this calculation does not cover
- Only two cost lines feed the subtotal — materials and labor. Permits, equipment and tool rental, dumpster and disposal fees, subcontractor invoices, insurance, fuel and supervision are not inputs, so anything you have not already buried inside those two figures is neither marked up nor billed.
- Materials and labor are marked up at one identical rate, because the percentage is applied once to their combined subtotal. If you price material at one percentage and labor at another — a common split — price the two separately and add the results, since a single blended figure here will not reproduce that.
- The markup amount in the breakdown is gross, not profit: it is the one figure that has to carry overhead and profit together, and there is no overhead input to separate them. Office costs, vehicles, estimating time and idle days come out of that same amount before anything is left over.
- The gross margin row is the same money expressed against the price instead of against the cost, and it is always the smaller percentage of the two — a 20 per cent markup is a 16.7 per cent margin. It is shown because the two are routinely used interchangeably and are not equal; it is still gross, so overhead has not been taken out of it, and it is not a net profit figure.
- Nothing is added after the markup — the total is exactly the subtotal multiplied by one plus your percentage. Sales tax, VAT or GST, permit fees passed through to the client, and card or financing charges all sit outside it, so the number is a price to quote rather than a finished invoice.
- The costs you enter are treated as final and already known. There is no waste allowance and no contingency term, so if supplier prices move between quote and purchase or the hours run long, the overrun comes out of the markup instead of being added to the price.
- Each cost line accepts up to 500,000 and the markup up to 200 per cent, which caps how large a single job this will price without splitting it. The currency is a label only: the answer comes back in whatever currency you typed the costs in, with no conversion and no rounding to a tidy quotable figure.
One published number, five different days
A single rate is a blend, and a blend is wrong for every job inside it by a different amount. Four consecutive days on a domestic first fix, booked three weeks out, and one Thursday spent as the third pair of hands on somebody else's site are not the same product. The first carries its own welfare, its own waste, its own parking, all the material handling and the whole customer relationship; the second arrives with the site already set up, a skip in the drive, a foreman telling you where to stand, and payment terms measured in weeks rather than in days.
Terms are the part of that list that never gets priced. A day paid on the Friday and a day paid at the end of the month following invoice are not the same price, because the second one is being financed by you at whatever your overdraft costs, and because it is one more day of exposure to a customer whose accounts you have not read. Nothing about the work changed. A firm that sells its one published rate to a householder who pays on completion and to a main contractor who pays in sixty has handed the second a discount that appears on no document and in no conversation. When money is due to move at all is settled properly on this site's stage-payments guide; what belongs here is only that the terms have to be inside the rate before they are agreed, not resented afterwards.
The one discount genuinely worth giving on a day rate is the block, and the reason has nothing to do with volume. Four consecutive days sold together remove three separate risks at a stroke — one mobilisation instead of four, no tied days in the middle, one set-up and one conversation. Discounting a block is being paid for contiguity, which is the scarcest thing in any diary. Discounting a single day because somebody asked nicely is giving away the only thing the business sells.
The plant question runs the same way and is the one most often left inside the blend. A day where your own mixer, dumper or dust extraction is standing on site is a more expensive day than one where it is not, and whether that kit is hired for the week or owned and carried across the year changes what it costs per day by a large factor — a comparison this site keeps on its own calculator rather than inside a rate, because the answer flips on how many days a year the machine is actually used.
| The day | What arrives with it | What this rate carries that the others do not |
|---|---|---|
| A block of consecutive days, domestic | One mobilisation, one set-up, and no gap days sitting in the middle of it | Its own welfare, waste and parking, and the whole of the customer relationship from first call to final snag |
| A single booked day, domestic | A drive out and a drive back for one day of work | The entire mobilisation that a block would have spread over four days, recovered from one |
| A call-out or emergency attendance | An hour or two of work and a day with nothing else that can be put in it | The rest of the day, which is why this one is a minimum charge and not a rate at all |
| A day on another contractor's site | Welfare, waste, access, scaffold, supervision and somebody else's programme | Payment terms measured in weeks, and the days lost when that programme slips and your week was held for it |
| A day where the client supplies the materials | No purchasing, no delivery to chase and no money tied up in stock | The guarantee question, because you are fitting a product you did not choose, did not buy and cannot send back |
The rate that pays you less the better you get
A day rate has one genuinely awkward property: it is the only pricing mechanism in the trade where competence reduces income. Learn a job well enough to finish it in three days instead of four and the day rate hands the fourth day's money back to a customer who had already agreed to pay it and did not ask for the saving. A fixed price does the exact opposite, paying the difference to whoever created it. Across a working life that gap is most of the distance between running a business and having a well-equipped job.
So the rate has two functions and only one of them is a price. Internally it is an instrument: the unit you estimate in, the floor you decline below, and the thing you multiply by a number of days to build a fixed price in the first place. Externally it is a quotation, and one worth being slower to give than the trade generally is. Where the extent is honestly unknowable — chasing a fault, opening up, working behind somebody else's discoveries — a day rate is the truthful answer, and a fixed price would carry a risk premium the customer pays whether or not the risk turns up. Where you have done the job forty times, quoting a day rate is charging for your slowest version of it.
The publication problem follows from that. A fixed price is private and dies with the job. A day rate is a price list with one line on it, and everybody who has ever asked for it is carrying a copy. That is precisely why day rates go stale in a way fixed prices never do: raising a fixed price is invisible, raising a day rate is an announcement, so the number sits still for years while insurance, fuel, tools and the van underneath it all move. If a rate has not changed since the van was bought, the explanation is almost never that the costs were stable.
There is a second cost to publishing it, and it is a conversational one. A day rate discloses your cost structure in a way a total never does, and it invites the arithmetic that follows — three days, so that is this much — and then the follow-up, which is whether it could be done in two. A fixed price moves the discussion onto the finished work, which is where you would rather have it. Neither is dishonest and both have their place, but a firm that quotes a day rate for everything has chosen to spend the rest of its working life negotiating about its own speed. There is a reason the trades that price per point, per metre and per opening never have that conversation, and how one of those item prices is actually assembled is the unit-rate guide's subject rather than this one's.
Moving it, and the December that proves it
Move a published rate on a date, not on a job. Every quote already out stays at the old number until it expires, which means the quotes need an expiry on them in the first place. Customers with work in the diary hear it from you rather than from somebody else. And expect to lose the bottom of the book, because you will: the customers who leave over a rate rise are the ones who were choosing on the rate, and what a rise actually costs in work volume is the discount table on the pricing guide read backwards — set out there in full, and not repeated here.
Then the proof, once a year, in whichever quiet week you get. Count the days you actually invoiced. Not turnover and not profit, both of which are affected by too many things to diagnose anything: a count of days, taken off the invoices themselves. Set it beside the sellable-day figure the rate was built on twelve months earlier. Assume two hundred and invoice a hundred and sixty and the rate was a quarter light for the whole year, on every single job, and nothing you did on any individual one of them was ever going to fix that. It is a smaller exercise than reconciling a job and it catches a much larger error, which is the argument for doing it first. Whether a job currently running is ahead or behind is a live measurement and a different discipline, handled on this site's job-tracking guide.
Keep the count filed with the rate, because neither means anything on its own, and the pair of them is what makes the next rise defensible to yourself. The shortest honest description of a day rate is that it is the price of a thing that cannot be stored, quoted before anybody has described the work, to a customer who will repeat it to their neighbours. A number with that much riding on it deserves to be the output of a division somebody did on purpose, rather than the one that has been in the phone since the van was new.
The counts to do before the number changes
Five of these are counts and one is a date. None of them is a price and none of them can be looked up, because they all come out of your own diary. Done once with last year's open, they hold until the next December.
- Whole sold days last year, counted off the invoices — Days with one job in them, start to finish, nothing else booked. Not working days, not available days, not days you were busy — days somebody paid for the whole of. This is the denominator, and it is almost always smaller than the number people carry in their heads.
- Tied and fragmented days, counted against the jobs that caused them — The gap between first fix and second, the afternoon left over after a ninety-minute call-out, the week held for a programme that slipped. They are created by specific work and paid for by nobody, which is why they only ever show up when they are counted deliberately.
- The working day, defined in hours and in miles — When it starts, where it starts, how far the travel is included to and what happens beyond that radius. A rate is only true inside the area it was built for, and the argument about it always happens on site rather than on the phone.
- The minimum charge, set from the day a short visit consumes — Not from the length of the visit. The floor is what the day costs when that visit is the only thing in it, because the afternoon around it cannot be sold to anybody else at that distance.
- A second rate for somebody else's site — Their welfare, their skip, their supervision and their payment terms make it a different product. Selling it at the domestic number is a discount that never appears on a document, and it compounds every time their programme moves.
- The date the new rate starts, and what happens to quotes already out — Rates move on dates, not on jobs. Quotes issued before it stay at the old figure until they expire, which requires them to have carried an expiry in the first place.
Opens the calculators above on one screen with the dimensions from this article already filled in. Quantities only — this site publishes no price list, because local prices vary too much to publish honestly.