Thinking clearly about labour rates in 2026
Most builders can tell you their day rate in a heartbeat. Far fewer can tell you what that rate has to carry before a single pound of it becomes profit. This is a working method for setting a labour rate you can defend, with the arithmetic laid bare.
A day rate is not a wage
The most expensive mistake in trade pricing is treating a day rate as if it were take-home pay with a bit on top. A labour rate has to carry everything it costs to put a productive person on site for a day, and those costs have grown quietly year after year: employer National Insurance, pension contributions, holiday cover, training days, tools, the van that carries them, and the unbillable hours spent quoting, ordering and tidying up loose ends.
Suppose you pay a good tradesperson a wage that works out at 160 GBP per productive day. By the time you add employment costs, paid time that is not on the tools, and a fair share of your overhead, the true cost of that day is often half as much again. Charge 200 GBP for it and you are not making a thin margin. You are paying for the privilege of working.
The build-up, line by line
Work through your own version of this table once a year, and again whenever wages or insurance move. Suppose your figures look like this:
| Line | Worked example | Notes |
|---|---|---|
| Base wage per productive day | £160 | Actual pay divided by days genuinely on the tools |
| Employer NI and pension | £25 | Rises whenever thresholds and rates change |
| Holiday, sickness, training cover | £30 | Around 30 working days a year are paid but not productive |
| Overhead share | £40 | Van, insurance, tools, phone, software, yard, your admin time |
| True cost per day | £255 | Break-even before any profit |
| Margin at 15 percent on cost | £45 | Set deliberately, not by habit |
| Charge-out rate | £300 | The number that goes into every quote |
Two things jump out when builders do this honestly. First, the gap between wage and true cost is bigger than instinct suggests. Second, the margin line is usually the one that got squeezed to nothing while the others quietly grew. We cover how to set that line properly in overheads and profit: setting a margin you can defend.
Productive days are the hidden divisor
The wage line above hides a trap. A tradesperson on the books for 260 weekdays a year does not give you 260 productive days. Take off holidays, bank holidays, a few sick days, training, wet days on external work, and the odd day lost to a job that was not ready, and 220 productive days is a decent year. Divide the full annual cost of employing someone by 220, not 260, and your rate rises by roughly a sixth before you have changed anything else.
The same logic applies to yourself. If you spend two days a week quoting, ordering and managing, your own on-the-tools rate has to carry those days too, or you can hand the quoting hours to software and win them back. Either answer is fine. Pricing as if those hours were free is not.
Rates move, so should yours
Wages in the trades have moved steadily for years, and every April brings changes to employment costs. A rate set in 2023 and never revisited is not a rate, it is a fossil. The discipline is simple: recalculate the build-up annually, and nudge live quotes whenever a real input changes. A 20 GBP per day drift on a two-person, eight-week job is over 1,600 GBP of margin gone, which is the sort of leak explored in seven estimating mistakes that quietly kill a builder's margin.
Different trades, different rates, one system
A single blended day rate is convenient and wrong. Groundworkers, bricklayers, joiners, electricians and plasterers cost you different money and produce different value per day, and their availability varies by region, which is why the same extension prices differently across the country, as we unpack in regional pricing: why the same extension costs different money. Hold a small rate book: one defensible rate per trade, reviewed annually, applied consistently to every quote. Consistency is what makes your pricing auditable when a client pushes back.
This is exactly the structure QS Quoter is built around. You set your own day rates per trade, your own materials uplift and your own margin, and every quote is priced from your numbers rather than a national average that matches nobody. Every line stays editable, so when your rate book moves, your quotes move with it.
What to do this week
- Run the build-up table above with your real numbers. Do not round the ugly ones away.
- Count your genuinely productive days last year. Use that as the divisor.
- Set one rate per trade and write them down where quoting happens.
- Diary a rate review for the first week of April, every year, without fail.
Price every job at your rates, not someone else's
QS Quoter turns a job description or drawings into a full priced quote using your day rates, your materials uplift and your margin. Every line is editable, and you get a polished client copy plus a private cost breakdown for you.
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