FREE TOOL · TRADESMEN
Calculate your sell price, VAT, and true profit margin on any UK materials in 2026 — and finally understand the real difference between markup and margin.
Enter what you paid for the materials (your trade/cost price, ex-VAT).
Most tradesmen use 15–40% for standard materials.
VAT registered
Adds 20% VAT to sell price
Sell Price ex. VAT
£260.00
30% markup
Profit Margin
23.1%
£60.00 profit
Markup
% added on top of cost. A 50% markup on £100 = £150 sell price.
profit ÷ cost × 100
Margin
% of revenue that is profit. £50 profit on £150 revenue = 33% margin.
profit ÷ sell price × 100
Your current 30% markup = 23.1% margin. To achieve a 50% margin, you would need a 100% markup.
Material markup is one of the most misunderstood areas of trade pricing. Getting it wrong — in either direction — either loses you money or loses you the job. Here is exactly how to think about it.
Markup is always expressed as a percentage of the cost price. The sell price = cost × (1 + markup%). A 30% markup on £200 of materials gives a sell price of £260. The profit is £60, and the margin (profit as a percentage of sell price) is 23.1%. These are different numbers — and confusing them is the most common pricing mistake in the trades.
Materials are not free to supply. You spend time quoting them, ordering them, collecting or receiving them, storing them, managing returns, and handling defects. UK tradesmen with trade accounts typically receive 10–30% off retail pricing — but passing this saving straight to customers leaves no margin for the risk, time, and capital you tie up. The industry standard of 15–40% markup reflects this real cost of supply.
VAT-registered tradesmen charge 20% VAT on their full sell price (materials + labour), collected on behalf of HMRC. They can reclaim the input VAT on materials purchased from VAT-registered suppliers. Non-registered tradesmen (below the £90,000 threshold) do not charge or reclaim VAT. The key point: your markup should be calculated on the ex-VAT cost, and VAT is then added to the resulting sell price.
Standard materials from main builders' merchants: 20–35%. Specialist or hard-to-source items: 40–60%. Bespoke or made-to-order items: 50%+. Small consumables (silicone, screws, cable ties): often billed at a fixed rate per job rather than individual markup. High-value items like boilers or heat pumps often have tighter margins (10–20%) because customers can price-check them easily online.
WORKED EXAMPLE
Mike is a plumber in Cardiff pricing a bathroom suite job. He pays £650 ex-VAT for the suite at trade, and £180 for pipework and fittings. His standard markup is 35%. He is VAT-registered.
Suite + fittings (cost)
£830
35% markup
+£290.50
Sell price (ex-VAT)
£1,120.50
VAT (20%)
+£224.10
Materials line on quote (inc. VAT)
£1,344.60
26% margin · £290.50 materials profit · plus labour separately
Adjust the calculator above with your actual material costs and markup percentage. Labour is quoted separately — use the Labour Cost Estimator for the full picture.
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Common questions about material pricing and markup.
Markup is calculated on cost: a 50% markup on £100 materials = £150 sell price. Margin is calculated on revenue: the same £50 profit on £150 revenue = 33% margin. They are not the same number — many tradesmen confuse them. A 100% markup gives a 50% margin. The calculator shows both so you know exactly where you stand.
Most UK tradesmen apply 15–40% on standard materials. Trade accounts typically give 10–30% below retail, so a 25–35% markup passes on a fair price to the customer while covering your time sourcing, collecting, and managing materials. For specialist or hard-to-source items, 40–60% is common. Never mark up below cost — also factor in fuel and time spent on materials runs.
The markup formula is: (sell price − cost price) ÷ cost price × 100. So if you paid £200 for materials and charge £260, the markup is (£60 ÷ £200) × 100 = 30%. To quickly calculate sell price from cost with a percentage markup: sell price = cost × (1 + markup% ÷ 100). The calculator above automates this instantly.
No — quote a single job price or show materials as a line item at your sell price, not your cost. Customers who see your cost price will always question the markup, even if it's entirely fair. Use markup to set a profitable price, not as a line to argue over. The exception is cost-plus contracts where markup is agreed upfront in the contract terms.
Many tradesmen undervalue the time spent sourcing, collecting, and managing materials. A 30-minute parts run costs you the HMRC mileage rate plus 30 minutes of your time at your hourly rate. For a tradesman charging £45/hour, that's £22.50 of labour plus 20p/mile in fuel — often £30–£40 per trip. Include this in your markup or as a separate line item on larger jobs.
If you are VAT-registered, you must charge VAT on the full sell price (materials + labour). You can reclaim VAT on materials you purchase. If you are not VAT-registered (under the £90,000 threshold), you do not charge VAT to customers and cannot reclaim input VAT. The calculator shows both ex-VAT and inc-VAT sell prices for registered tradesmen.
The UK VAT registration threshold is £90,000 in any rolling 12-month period (as of 2026). If your taxable turnover exceeds this, you must register for VAT within 30 days. Many sole trader tradesmen choose to register voluntarily below this threshold to reclaim VAT on materials — this can be advantageous if your customers are VAT-registered businesses who can reclaim the VAT you charge.
Some customers ask for a materials-only quotation, intending to supply their own labour (or do it themselves). In this case, charge your standard sell price including markup — you are still sourcing, collecting, and managing the materials. Do not supply materials at cost price; this undervalues your merchant relationships, account access, and the risk you carry for defective or incorrect materials.
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