Last checked 19 October 2026
Quick answer
There’s no official rate for most kinds of work, so pricing is your decision. Three common methods are cost-plus (your costs plus a margin), a day or hourly rate built from what you need to earn, and value-based pricing. Whatever you charge, consumer law treats what you tell a consumer, including a quote, as binding if they rely on it, and any price you advertise to consumers must include VAT and other unavoidable costs.
This is general information, not legal or tax advice. Check GOV.UK or speak to an accountant about your situation. Why we say this.
“What should I charge?” is one of the hardest questions when you start out. Charge too little and you work long hours for not much. Charge too much and you may struggle to win work. This guide explains the common pricing methods, with clearly made-up numbers to show how they work, then covers the rules on quotes, estimates and advertised prices.
We don’t publish “typical rates” for any job. Rates vary by area, experience and type of work, and we’d rather you build your price from your own numbers.
Start with your costs
Every method needs a clear picture of what it costs to run your business. HMRC’s Expenses if you’re self-employed guide is a useful checklist, because it lists the kinds of running costs businesses have, such as:
- office costs, for example stationery or phone bills
- travel costs, for example fuel, parking, train or bus fares
- clothing, for example uniforms
- stock or raw materials
- financial costs, for example insurance or bank charges
- premises costs, for example heating, lighting and business rates
- advertising or marketing, for example website costs
- subscriptions and training courses
Add up what you expect to spend in a year, including things you pay for monthly, such as software, and things you replace now and again, such as tools or equipment. Our guide to allowable expenses explains how these costs are treated for tax.
Then think about what you’ll owe in tax. As a sole trader, you pay Income Tax and National Insurance on your profit. Our guide to how much tax to set aside explains how the bill is built.
Method 1: cost-plus pricing
Cost-plus means working out what a job costs you, then adding an amount on top. It suits work with clear material costs, such as making products or jobs where you buy parts.
Cost-plus (illustrative numbers only)
A maker’s materials for one item cost £12, and packaging costs £2. That’s £14 in direct costs. Their share of running costs works out at £4 an item, based on how many items they expect to sell in a year. Total cost: £18. If they add £12 for their time and profit, the price is £30.
The risk with cost-plus is forgetting costs. Time spent quoting, travelling or doing admin is real time, even though you can’t bill for it directly.
Method 2: a day or hourly rate
Many service businesses charge by the hour or day. One way to build a rate is to work backwards from what you need the business to bring in.
- Decide what you need to earn in a year, before tax, to cover your living costs and the tax on your profit.
- Add your yearly business costs.
- Work out how many days you can bill. Take out weekends, holidays, bank holidays, possible sick days and time for admin, quoting and marketing.
- Divide the total from steps 1 and 2 by your billable days.
Day rate (illustrative numbers only)
Someone wants £30,000 a year before tax and expects £6,000 of business costs. That’s £36,000 to bring in. After weekends, holidays and admin time, they estimate 180 billable days. £36,000 divided by 180 is £200 a day. At a 7.5 hour day, that’s about £26.67 an hour.
The billable days figure is the one people most often overestimate. If you spend one day a week on admin, quotes and travel between jobs, that’s around a fifth of your working time you can’t bill.
Method 3: value-based pricing
Value-based pricing starts from what the result is worth to the customer, rather than how long it takes you. It’s common in creative and consultancy work, where a fast job can still be valuable. It works best when you understand your customer’s situation well, so it often sits alongside a day rate rather than replacing it.
Check your price against the market
Whichever method you use, it helps to know what customers are used to paying locally. Ways to get a feel include looking at published prices from businesses like yours, asking people in your trade, and noticing which quotes you win and lose. If you’re well below what others charge, you may be leaving money on the table. If you’re well above, think about how you’ll explain the difference. Our guide to reviews and referrals covers one way to build trust that supports your price.
Quotes and estimates
Business Companion, the Trading Standards guidance site, explains the difference in its guide to supplying services: a quotation is normally a fixed price, while an estimate is generally a rough guess of what the work would cost.
Three points from consumer law are worth knowing when you deal with consumers:
- What you say can become part of the contract. Section 50 of the Consumer Rights Act 2015 treats anything said or written to a consumer about you or the service as a term of the contract, if the consumer takes it into account when deciding to go ahead or making decisions about the service later. Business Companion says this includes quotations and promises about timescales.
- No agreed price means a reasonable price. Section 51 says that if the contract doesn’t fix a price or say how it will be worked out, the consumer must pay a reasonable price, and no more.
- Changes can be agreed. Business Companion says the consumer and trader can change the contract by agreement, and recommends recording all changes in writing, because disputes often come from misunderstandings about what was agreed.
These Consumer Rights Act rules only cover contracts with consumers, meaning individuals buying mainly for personal use. If your customer is a business, the contract you agree matters more. Where no price is agreed, the Supply of Goods and Services Act 1982, section 15 implies that a business customer pays a reasonable charge.
A clear written quote usually covers what’s included, what isn’t, how long the price is valid for, when payment is due, and what happens if the job changes. If your contracts matter to your business, a solicitor can review your wording.
Showing prices with VAT
GOV.UK’s Marketing and advertising: the law guide says adverts must describe the actual cost accurately, including any ongoing or associated costs, such as subscription fees, and taxes, such as VAT. It gives the example of a price shown without saying it excludes VAT as misleading.
If you’re not VAT registered, you don’t charge VAT. If you become VAT registered later, your prices to consumers need to include it. Our guide to VAT registration explains the threshold.
Reviewing your prices
Costs change, and so does demand. Many sole traders set a reminder to review their prices once a year, and when a big cost changes, such as fuel, insurance or materials. Telling regular customers in advance about a price change, and putting it in writing, avoids surprises.
Frequently asked questions
Is there an official rate for my job?
GOV.UK doesn’t publish rates for self-employed work, and we don’t either. Pricing is a business decision for you, built from your own costs and your local market.
Should I charge by the hour or by the job?
Both are common. Hourly or day rates suit work where the time is hard to predict. Fixed prices suit work you can scope clearly, and customers often like knowing the cost upfront.
Is a quote legally binding?
How far a quote binds you with a consumer customer is a consumer law question. Citizens Advice explains consumers’ rights, and for your own situation, speak to a solicitor or other qualified adviser.
Do I need to show VAT in my prices?
GOV.UK says advertised prices must include taxes such as VAT. You only charge VAT if you’re VAT registered.
Sources
All checked on 19 October 2026.
- Expenses if you’re self-employed (GOV.UK)
- Marketing and advertising: the law (GOV.UK)
- Citizens Advice: consumer rights (citizensadvice.org.uk)
- Consumer Rights Act 2015, section 50 and section 51 (legislation.gov.uk)
- Supply of Goods and Services Act 1982, section 15 (legislation.gov.uk)
- Supplying services (Business Companion, Trading Standards guidance, last reviewed June 2026)
Where to check
What changed. : . 19 October 2026: First published.
