How to Quote a Job Without Underquoting Yourself (2026)

Executive Summary

Key takeaways, what you'll get from this guide

A step-by-step way to build a quote from your real costs, so the number is defensible rather than a gut feel
A worked example showing materials, labour, overheads, contingency, margin, and GST as separate lines
Why margin and markup are different numbers, and how getting them mixed up quietly costs you profit
The difference between a quote and an estimate, and why calling it the wrong thing can lock you into a losing price
The five habits that quietly cause underquoting, and the fix for each
What the rules actually require: a written quote, a GST-inclusive total, an itemised breakdown, and the deposit cap
How to win work at a fair price without being the cheapest quote on the job

Underquoting is rarely a pricing decision. It is usually a maths decision made too fast: a number that sounds about right, given without measuring the job, without adding up the real costs, and without a line for the thing that always goes wrong. A job quote is the fixed price you commit to before work starts, and it only protects your margin if it is built from your real costs, materials, labour, overheads, a contingency for the unexpected, and profit, rather than a number that just sounds about right for the job.

Before we get into the method, one thing worth saying: winning work at a fair price is far easier when customers come to you already trusting you, instead of pitting your quote against four others on a lead app. Our free Google Business Profile audit shows how easily customers find you in your suburbs, because the tradie who gets found direct is not the one forced to lowball. This guide walks through how to build a quote from the ground up, the habits that cause underquoting, and how to put it in writing so scope creep gets billed instead of absorbed.

A few things the rules make clear before you set a price:

In New South Wales, the government tells homeowners that contractors should give them a written quotation covering all the work to be done and all the materials to be used, not a verbal figure scribbled on the back of a business card. That is what your customer has been told to expect, so turning up without one already puts you behind 1.

The quoted price also sets your paperwork. A written contract is mandatory once the contract price is over $5,000 including GST: between $5,000 and $20,000 that is a small job contract, and over $20,000 it steps up to a full large job contract. The deposit can never be more than 10% of the total contract price, whatever the size of the job 2.

Whatever number you quote has to be the total, GST-inclusive figure shown as a single price, not a base rate with the GST bolted on as a surprise at invoice time 3.

A customer is also within their rights to ask for an itemised bill breaking down labour hours, hourly rate, and materials cost, which you must supply free of charge within 7 days of the request. Building that breakdown into the quote up front saves the scramble later 4.

What Actually Goes Into a Quote?

A proper quote is the sum of your real costs plus a margin, not a headline figure you reverse-engineer to beat the other bloke. The standard way to price a service job is cost-plus: work out the total real cost of doing the work first, then add a margin on top, rather than pricing off a gut feel or a competitor's number 5.

Break the real cost into its parts and nothing gets forgotten:

Materials. Every fitting, fixing, consumable, and hire item, priced at what it actually costs you, usually with a markup on top to cover procurement, handling, and the warranty risk you carry on the parts.
Labour. Your hours on the job, priced at a proper charge-out rate, not an employee wage. A charge-out rate carries your super, insurance, licence renewals, the van and fuel, your test gear, and the non-billable hours you spend quoting and chasing invoices. If you are still working that number out, see what an electrician should charge per hour, the same maths applies to any trade.
Overheads. The job-specific costs that are not labour or materials: tip and dump fees, parking, scaffold or equipment hire, permits. If your charge-out rate already carries your general overheads, only the job-specific ones go here, so you do not count them twice.
Contingency. A line for the unexpected, because the wall is never square and the old wiring is never what the last bloke said it was.
Margin. Your profit, on top of cost. This is the bit that grows the business, buys the next tool, and gets you through a quiet month. Be careful here: margin and markup are two different numbers, and mixing them up is worth real money. More on that under the worked example.
GST. Once you are registered, 10% on top, quoted inclusive so it never comes out of your own pocket.

Miss any one of those and you are not quoting, you are guessing. The most commonly missed lines are overheads and contingency, and those two are where most underquoting lives.

Action: Write those six headings on a page and treat them as a checklist for every quote. If a line is blank, you have not finished pricing the job.

How Do You Price a Job, Step by Step?

Here is the method, start to finish. Follow the same order every time and the number at the bottom will be one you can stand behind.

Assess and measure the job. Get on site, measure the run, count the points, check access, and note anything the customer forgot to mention. A quote built off a photo and a hopeful guess is the fastest road to underquoting.
List every material at real cost. Itemise the parts, price them at what you pay, and add your markup. A written list means scope creep later shows up against something.
Price the labour at your charge-out rate. Estimate the hours honestly, including setup, clean-up, and travel, then multiply by your real charge-out rate.
Add the job overheads. Tip fees, hire, parking, permits, anything specific to this job that your charge-out rate does not already cover.
Add a contingency, then your margin. A contingency covers the surprises, and your margin is the profit on top of cost. There is no official industry percentage for either, so work your contingency out from your own history: go back over your last ten jobs, add up what the surprises actually cost you, and carry that as a percentage of cost.
Put it in writing as a GST-inclusive total, with an itemised breakdown. One clear number the customer commits to, backed by the lines that make it up.

Run those numbers on a simple job and it looks like this. The figures are illustrative, so plug in your own:

Line	Amount
Materials (at cost)	$600
Labour (16 hours at a $70 charge-out rate)	$1,120
Job overheads (tip fees, parking, consumables, hire)	$120
Contingency (10% of cost)	$184
Markup (15% added on top of cost and contingency)	$304
Subtotal	$2,328
GST (10%)	$233
Total quoted (GST-inclusive)	$2,561

Now the bit that costs tradies the most money without them noticing: margin and markup are not the same number. Markup is a percentage you add on top of your cost. Margin is the share of the final price that ends up being profit. In the table above, $304 is a 15% markup on the $2,024 of cost and contingency, but against the $2,328 subtotal it works out at a margin of about 13%. Add 15% and you do not get a 15% margin, you get less.

The conversion is worth memorising, because it runs the wrong way to instinct. A 20% markup leaves you a margin of about 17%. To actually keep a 20% margin you need a 25% markup, and for a 30% margin you need a markup of about 43%. If you have been adding 20% for years thinking that is your margin, you have been running several points thinner than you believed. Decide which number you are aiming at, then do the sum in that direction.

Notice too that the labour line is a charge-out rate, not a wage. That single distinction is where most new operators go wrong: they price their hours at what an employer once paid them, forgetting that as the business they now carry the super, the insurance, the van, and every unpaid hour spent quoting and driving.

Action: Build your next quote line by line in this order. Keep the breakdown even if the customer only ever sees the total, because you will need it the moment anyone questions the price or asks for an itemised bill.

Quote or Estimate: Which Are You Actually Giving?

These two words get used as if they mean the same thing. They do not, and the difference decides whether you can correct a bad number later.

A quote is you saying on paper that you have all the information you need to price the job properly, and that this is the price. If the customer proceeds, that quote forms part of a legally binding contract between you and them 6. So a figure given after a two-minute look at the driveway is not a rough idea you can revise, it is a commitment.

An estimate is your rough guide to the cost when you do not have the full specifications, and unlike a quote it is not legally binding. An estimate normally carries a disclaimer saying the price is subject to change 6.

Two things follow. First, if the job carries real unknowns, the old switchboard, the wall nobody has opened, the slab you cannot see under, say the word "estimate", put it on the paperwork, and say what would move the price. Second, if you do quote, quote properly, because you have given away your right to fix the figure afterwards. Underquoting hurts most when the number was binding and you did not realise it.

Action: Put the word "Quote" or "Estimate" at the top of your template, and choose which one you are giving deliberately on every job rather than by habit.

Why Do Tradies Underquote?

Underquoting is almost always one of five habits, not a market that will not pay. Name the habit and you can fix it.

Eyeballing the job instead of measuring it. A number pulled from a glance at the driveway is a number that misses the hard bits. Measure and count before you price.
Forgetting overheads, insurance, and super in the day rate. Pricing your labour at an employee wage instead of a charge-out rate means every hour on site quietly loses money on the costs an employer used to cover.
No contingency line. With nothing set aside for the wall that is not square or the wiring that is not to code, the first surprise eats your profit and the second eats your wage.
Matching a competitor's lowball number. Their price is built from their costs, not yours, and you have no idea what corners it assumes. Racing a rival to the bottom just means you both lose money faster.
Not itemising, so scope creep goes unbilled. Without a written breakdown, every extra the customer asks for feels like part of the original job, and you do it for free rather than have the awkward conversation.

The thread running through all five is the same: a number produced too quickly, with no working behind it. Slow the quote down and every one of these disappears.

Action: Take your last three quotes and check each against this list. If you underquoted, one of these five is almost certainly why, and now you know which one to fix.

Should You Put It in Writing?

Yes, always, and not only because it looks professional. A written quote is where the rules and your margin meet.

Give a written quotation, not a verbal figure. NSW tells homeowners to expect a written quotation that lists all the work to be done and all the materials to be used, so both sides know exactly what was agreed before the first tool comes out 1.
Quote the total, GST-inclusive. The price has to be shown as a single, GST-inclusive figure, not a base price with the tax added later as a surprise. Quote inclusive and the 10% never comes out of your pocket 3.
Itemise it. A customer can legally ask for an itemised bill breaking down labour hours, hourly rate, and materials, and you must supply it free within 7 days if they ask within 30 days of the original bill. Build the breakdown into the quote and you are never caught scrambling 4.
Know the contract thresholds and the deposit cap. Over $5,000 including GST a written contract is mandatory: $5,000 to $20,000 is a small job contract, over $20,000 is a large job contract, and your deposit can never exceed 10% of the total contract price 2.

These are New South Wales figures, and the thresholds and paperwork rules vary by state and territory, so confirm the detail with your own regulator. The principle holds everywhere: a written, itemised, GST-inclusive quote protects both the customer and your margin.

Action: Turn your quote template into one that always shows a GST-inclusive total plus an itemised breakdown. Check your state's contract thresholds and deposit cap so a bigger job never catches you out.

How Do You Stop Scope Creep Eating the Job?

Scope creep is the slow leak that turns a well-priced quote into a loss. The customer asks for "just one more" power point, then a second, then a tidy-up that was never in the job, and because none of it was written down, it all gets done for free.

The fix is the itemised quote you already built. When the original scope is a written list, anything outside that list is visibly an extra, and an extra gets a variation: a short written note of the added work and its price, agreed before you do it. It does not need to be formal. A text message that says what the extra is and what it costs, with a yes back, is enough to stop the free-work spiral.

This is also why the itemised breakdown matters beyond the law. The same list that satisfies a customer's right to an itemised bill is the list that lets you say, plainly and without friction, "that one is outside the quote, here is what it adds."

Action: Decide your rule now: no work outside the written quote without a written variation and a price the customer has agreed to. Put that line on the quote itself so nobody is surprised.

How Do You Win Work Without Being the Cheapest?

A fair quote only works if you are not forced into a bidding war to win the job. The tradie who competes on price against four others on a lead app has already lost margin before they start. The tradie a customer found directly, read good reviews about, and trusts, is booking the job, not haggling over it.

That comes down to being easy to find and easy to choose. A complete Google Business Profile, a steady flow of reviews, and a simple website with a page for each service you offer will do more to protect your prices than any quoting trick, because a customer who came to you is far less price-sensitive than one comparing five faceless quotes. For the full picture on getting found, start with our Google Business Profile guide for Australian tradies.

What a tradie website costs

Core Multi-Page$1,999
core site, About, Reviews, Contact + a page per service
Max Multi-Page$2,999
everything in Core + 10 local suburb pages
Pro Multi-Page$6,498
everything in Max + 10 more suburb pages, GBP optimisation and 30 directory listings

Maintenance: optional, from $50/month.

Free strategy call →

A 20-minute call and a plan for more leads. No sales pitch.

Action: Set up and verify your Google Business Profile this week, then get a proper mobile-first website live, so the work that finds you comes from people ready to book at your price, not shop yours against the cheapest bidder.

Want Someone to Check How You Show Up?

Pricing right is only half the battle. The other half is being the tradie customers find and trust before they ever ask for a quote. Made 4 Tradies offers a free, no-obligation audit for Australian trade businesses.

Free Google Business Profile audit: we check whether you appear on the map for your trade in your suburbs, your review profile, and what is costing you the free calls. PDF in 24 hours.
Free website audit: if you have a site, we check whether it is built to turn searches into booked jobs, or quietly sending them to a competitor.

No call required. No pitch. Just a straight read on what is costing you work.

Frequently Asked Questions

How do you quote a job without underquoting?

Build the price from your real costs rather than a gut feel. List materials at cost with a markup, price your labour at a proper charge-out rate that covers overheads and super, add a contingency for surprises, then add your margin and GST. Measure the job before you price it, and put the number in writing so extras get billed as variations.

What should be included in a job quote?

Six things: materials, labour, job overheads, a contingency, your margin, and GST. Show it as a single GST-inclusive total backed by an itemised breakdown of labour hours, hourly rate, and materials. Keeping that breakdown means you can answer a price query or an itemised-bill request without scrambling.

How much contingency should I add to a quote?

There is no official industry percentage, so work it out from your own jobs rather than copying a number off the internet. Go back over your last ten jobs, add up what the surprises actually cost you, and carry that as a percentage of cost. Renovation and repair work on old buildings warrants more, because what is behind the wall is rarely what you were told, and a clean new-build job with full access can carry less. The point is to have a line for the unexpected at all, rather than absorbing every surprise out of your margin.

What is the difference between margin and markup?

Markup is a percentage you add on top of your cost. Margin is the share of the final price that is profit. They are not the same number, and adding 15% does not leave you a 15% margin, it leaves you about 13%. To keep a true 20% margin you need a 25% markup, and for a 30% margin you need about 43%. Decide which number you are aiming at before you pick a percentage, because assuming markup and margin are interchangeable quietly costs you several points of profit on every job.

What is the difference between a quote and an estimate?

A quote says you have all the information you need to price the job properly, and once the customer proceeds it forms part of a legally binding contract. An estimate is a rough guide given without full specifications, is not legally binding, and normally carries a disclaimer that the price is subject to change. Choose the word deliberately, because giving a quote means you have given away your ability to revise the figure later.

Do I have to give a written quote in Australia?

There is no single national rule forcing a written quote, but NSW tells homeowners to expect one listing all the work and all the materials, and the paperwork steps up with the job size: over $5,000 including GST a written contract is mandatory, $5,000 to $20,000 as a small job contract and over $20,000 as a large job contract. Rules vary by state and territory, so confirm the detail with your own regulator, but a written quote is best practice everywhere.

Should a quote include GST?

Yes, if you are registered for GST. The quoted price must be shown as a single, GST-inclusive figure, not a base price with the tax added as a surprise later. Quoting inclusive means the 10% never comes out of your own pocket when the invoice lands.

Can a customer ask for an itemised bill?

Yes. A customer can request an itemised bill breaking down labour hours, hourly rate, and materials cost, and the business must supply it free of charge within 7 days, provided the request is made within 30 days of the original bill. Building that breakdown into the quote up front means you already have it ready.

How big a deposit can I ask for?

In New South Wales, the deposit can never be more than 10% of the total contract price, regardless of the size of the job. Deposit and progress-payment rules vary between states and territories, so check your own regulator before you set your terms.

How do I stop scope creep from eating my margin?

Start from an itemised written quote, so the original scope is a clear list. Anything the customer asks for beyond that list becomes a variation: a short written note of the extra work and its price, agreed before you do it. A text with the added item, the cost, and a yes back is enough to stop doing extras for free.

References:

This is general information for Australian trade businesses, current as of 2026. It is not legal, tax, or financial advice. Contract thresholds, deposit caps, and tax rules change and vary by state and territory, so confirm the current figures with the official source linked and speak to a licensed accountant about your own situation.

Published by Made 4 Tradies, built by online experts who understand tradies. Serving Sydney, the Central Coast, Newcastle, and the Hunter.