How to estimate the cost of a job without losing money on it
An estimate has two halves. The first is what the job costs you: materials, the waste you will
throw in a skip, the hours, the plant hire, the dump fees. The second is what keeps your business
alive: overhead, markup and a contingency. Most estimates that lose money get the first half roughly
right and skip the second half entirely.
This page prices both halves and shows the arithmetic while you work, so you can see the moment a
discount eats your margin. Leave a rate at zero and the line is flagged rather than counted, because
a total built on a missing price is worse than no total at all.
The scope changes with the work. Pick your trade and the estimator loads the sections and the
units that trade bills in, whether you are a plumber, electrician, HVAC technician, general
contractor, carpenter, painter, roofer, landscaper, handyman, locksmith, flooring installer, tiler,
auto mechanic, appliance engineer, pest controller, cleaner, mover or welder. Creative and
professional work is covered the same way, from photographers and videographers to designers,
developers, consultants, accountants, lawyers, architects, engineers and translators, along with
tutors, personal trainers, therapists, event planners, caterers, salons, pet services, driving
instructors and childcare. Forty six in total, matching the professions in the invoice generator.
What contractors forget to put in an estimate
Disposal
Skip hire, dump fees and the trip to the tip. On a strip-out this is hundreds of dollars that
almost never reaches the estimate, and it comes straight out of your margin.
Access and protection
Masking, floor protection, moving furniture, scaffolding. It is an hour or three before the
real work starts, every single day of the job.
Permits and inspection
Permit fees, inspection call-out and the time spent waiting for it. Commercial clients expect
to see this line; leaving it off does not make it free.
Materials waste
Offcuts, spoiled mix, the extra gallon. Ten percent on materials is a normal allowance, and it
applies to what you buy, not to the hours you work.
Mobilisation
The supplier run, loading the van, the drive. Two hours of a day that nobody bills for, on a
job you priced by the hour.
Contingency
The thing behind the wall. Renovation work finds it roughly every time, and a contingency line
is the difference between a variation conversation and an argument.
Markup is not margin
Add 20 percent to your costs and you have a 16.7 percent margin, because the markup is measured
against cost while the margin is measured against the sale. Contractors who set a markup equal to the
margin they wanted are the ones who cannot work out where the money went. The estimate shows both
figures side by side. If you need to hit a specific margin, work backwards with the
markup calculator or the
profit margin calculator.
Estimate first, then quote
Price the job here, then turn the accepted numbers into a document the client can sign. The
quote generator produces the fixed-price version with validity dates
and deposit terms, and a saved estimate becomes an invoice once the work is done.
Cost estimating questions
How do I estimate the cost of a job?
Price the work in four layers: materials with a waste allowance, labour in hours at your rate, the job costs people forget such as disposal, permits and access, then the money that keeps the business alive: overhead, markup and a contingency. Estimating what the job costs you is the easy half. The half that decides whether you make money is what you add on top.
What is the difference between an estimate and a quote?
An estimate is your considered best figure and can move if the job changes. A quote is a fixed price you are offering to hold. Give an estimate when the scope has unknowns behind a wall or under the ground, and a quote when you can see everything you are pricing. Say which one it is on the document, because a client who thinks an estimate was a quote will argue about the final bill.
How much contingency should I add to an estimate?
Five to ten percent covers a job you have done many times before. Fifteen to twenty is closer to right for renovation work where you cannot see behind the surfaces until you open them. Contingency is not padding: it is the money that pays for the thing that was always going to be discovered on day three.
What is a typical markup for contractors?
Markup varies by trade and by risk, and it is not the same as margin. Adding 20 percent markup to your costs gives you a 16.7 percent margin, not 20. If you need a specific margin, work backwards from it with the markup calculator rather than adding the margin figure as a markup.
What do estimators forget most often?
Disposal, permits, access and protection, and the trip to the supplier. Skip hire and dump fees are real money that rarely make it onto the sheet. So is masking, floor protection and the hour spent moving furniture. These are the lines this page proposes for you, because they cost the job whether or not they are on the estimate.
Should I include labour hours or a lump sum?
Break labour into hours times your rate while you are building the estimate, even if the client only ever sees a single labour line. Hours are what you check the job against afterwards. A lump sum tells you nothing about whether you were fast or slow on the day.
Can I turn an estimate into an invoice?
Yes. Save the estimate to your dashboard with a free account and it stays there as a document you can turn into an invoice once the work is approved and done. The line items carry across, so the invoice matches what the client agreed to.
Is this cost estimator free?
Yes, and there is no signup for the calculator itself. A free account adds saving to your dashboard and lets the AI use your past documents to fill in your usual rates.
