Day rate
A day rate is the fixed amount a tradesperson charges for one day's work, whatever hours that day happens to take. It rolls labour, overheads and profit into a single daily figure so a job can be priced by the day instead of the hour.
In practice for trades
A day rate only works if it is built up from the real cost of a working day, not guessed from what the last firm charged. It has to cover the true cost of your labour, a share of your business overheads (van, tools, insurance, phone, software) and a profit margin, spread across the days you can actually bill.
Most trades set a day rate too low because they divide their target income by 365, or by five days a week, forgetting holidays, sick days, quoting, admin and travel. You only bill a fraction of the year, so the rate each billable day has to carry is higher than it first looks.
A day rate suits work where the hours are hard to predict. Where a job is short and well defined, an hourly rate or a fixed price usually prices better.
Worked example
You want to take home £45,000 and cover £15,000 of overheads, so £60,000 has to be earned. After holidays, admin and quiet days you realistically bill 200 days a year. Your day rate before materials is £60,000 ÷ 200 = £300 a day. Bill only 180 days and the same target needs £333 a day.
Related terms
- Charge-out rate: the same idea applied to an employee's time
- Job costing: checking afterwards whether the day rate actually covered the job
Work it out in FieldHive
Set a day rate that covers your costs and target profit with the Tradesperson Day Rate Calculator. It works back from what you want to earn and the days you can realistically bill.
Tradesperson Day Rate Calculator→
