Summary

Every pricing conversation eventually comes down to the same question: who carries the risk if the job takes longer than expected? Day work and fixed price are two different answers to that question, and tradespeople who pick the wrong one for a given job either lose money on overruns they didn't price for, or lose the job entirely by quoting an inflated fixed price to cover uncertainty they could have avoided pricing for in the first place.

The common mistake is treating this as a personality choice — "I always quote fixed price because customers like certainty" or "I always do day work because I got burned on a fixed quote once." Neither is a pricing strategy; they're habits that ignore the actual risk profile of the job in front of you. The right question for every job is: how confident am I, before I start, that I know exactly what's involved? A bathroom refit with the tiles chosen, the suite ordered, and no structural unknowns is a very different risk proposition from "re-plaster this ceiling" on a Victorian house with an unknown lath condition behind it.

This calculator sets out how to quantify that risk and translate it into a number — either the expected day-work bill, or the risk-adjusted fixed price that protects the same target profit margin set out in pricing guide. Getting the risk premium right (not guessing it) is what separates a sustainable fixed-price book of work from one that quietly loses money on every third job.

Key Facts

Quick Reference Table — Scope Certainty vs Recommended Model

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Scope Certainty Example Recommended Model Typical Risk Premium (if fixed)
Very high — fully specified, no unknowns New-build kitchen fit-out from an agreed design Fixed price 5-10%
High — minor unknowns, low cost impact Bathroom refit, suite and tiles already chosen Fixed price 10-15%
Moderate — some unknowns, moderate cost impact Re-wire of a house with partial access to voids Fixed price (with premium) or not-to-exceed 15-25%
Low — significant unknowns, high cost impact Opening up a solid wall of unknown construction Day work or not-to-exceed 25-35%+ if fixed at all
Very low — scope cannot be assessed until work starts Diagnostic/exploratory repair, "see what's underneath" Day work only Not applicable

Detailed Guidance

Step 1 — Assess scope certainty honestly

Before pricing, separate what you actually know from what you're assuming. List the specific unknowns: Is the subfloor condition confirmed? Has the wall been opened up to check for services? Is the exact finish/spec agreed with the customer, or still "to be decided"? Each genuine unknown adds variance, and variance — not the size of the job — is what should push you toward day work or a larger risk premium.

Step 2 — Calculate the expected day-work cost

Expected cost = (Most likely days × day rate) + materials at cost-plus markup, using the breakeven day rate methodology from pricing labour. This is your baseline "most likely" figure regardless of which model you ultimately quote.

Example: A re-plastering job estimated at 3-5 days (most likely: 4 days) at a £280/day rate = £1,120 labour + £180 materials = £1,300 expected cost.

Step 3 — Calculate the risk-adjusted fixed price

Fixed price = Expected cost × (1 + risk premium), where the risk premium reflects the variance identified in Step 1, not a flat figure applied to every job regardless of its actual uncertainty.

Example (same job, moderate uncertainty — lath condition behind the old plaster unknown): £1,300 × 1.20 (20% premium) = £1,560 fixed price.

Step 4 — Worked example: comparing the two models

WORKED EXAMPLE: RE-PLASTERING JOB WITH UNKNOWN LATH CONDITION
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Most likely scenario (60% probability):          4 days,  £1,300 total cost
Overrun scenario — rotten lath found (40% probability): 6 days, £1,850 total cost

EXPECTED VALUE (probability-weighted):
  (0.60 × £1,300) + (0.40 × £1,850) = £780 + £740 = £1,520

DAY WORK OUTCOME:
  Customer pays actual cost in either scenario — £1,300 or £1,850.
  Tradesperson's margin is protected in both cases.

FIXED PRICE AT A 20% PREMIUM ON THE MOST-LIKELY FIGURE:
  £1,300 × 1.20 = £1,560 quoted

  If the most-likely scenario happens (60% of the time):
    £1,560 charged vs £1,300 actual cost = £260 extra margin
  If the overrun scenario happens (40% of the time):
    £1,560 charged vs £1,850 actual cost = -£290 shortfall

  Average outcome across many such jobs:
    (0.60 × £260) + (0.40 × -£290) = £156 - £116 = +£40 average margin

✓ The 20% premium roughly breaks even against the expected-value
  calculation here — on a job with this much lath-condition
  uncertainty, a tradesperson doing many similar jobs would do
  better either raising the premium toward 25-30%, or simply
  quoting day work and letting the customer carry the variance.

This is the core lesson: a risk premium that looks generous on paper can still barely cover genuine uncertainty once you run the probability-weighted numbers — which is exactly why day work exists as an option, not a fallback.

Step 5 — Consider the not-to-exceed hybrid

Where a customer wants price certainty but the job has moderate uncertainty, a not-to-exceed cap splits the risk: bill day work as normal, but agree upfront that the total will not exceed a stated ceiling (set using the Step 3 risk-adjusted figure). The tradesperson keeps the upside of finishing early, the customer gets the downside protection of a cap — a smaller premium is justified than full fixed price because the tradesperson isn't absorbing unlimited overrun risk.

Step 6 — Document the choice and the variation process

State clearly in writing which model applies, using the correct legal term (quote for a binding fixed price, estimate for a non-binding day-work projection — see quoting tips). For fixed-price work, agree in advance how discovered conditions will be handled: a documented variation, signed off before the extra work starts, not a verbal "that'll be more" after the event.

Frequently Asked Questions

Can I switch from day work to fixed price (or vice versa) partway through a job?

Yes, but only by agreement — if work started as an estimate (day work) and a clearer scope has since emerged, you can offer to convert the remainder to a fixed price once both parties understand the revised scope. Converting unilaterally, or after the fact, risks a dispute over which figure actually applies.

Isn't a fixed price always better for winning the job?

Not necessarily — a fixed price with a large risk premium baked in to cover genuine uncertainty can price you out of the job entirely, where an honest day-work quote (with a stated most-likely range) can win the work and still protect your margin. Customers generally respond well to transparency about why a job can't be fully fixed-priced, provided it's explained before work starts.

What happens if actual days run well over on a fixed-price job?

The tradesperson absorbs the shortfall unless the overrun is caused by a genuine, documented change in scope (discovered condition, customer-requested addition) that was agreed as a variation before the extra work was done. This is exactly why Step 1's honest uncertainty assessment matters — it determines whether fixed price was the right call in the first place.

Does VAT treatment differ between the two models?

No — VAT is applied the same way regardless of pricing model, based on the tradesperson's VAT registration status; see vat registration for tradespeople. State clearly whether the day rate or fixed price quoted is inclusive or exclusive of VAT.

How do I estimate the risk premium if I've never tracked this before?

Start with the 10-20% range for typical domestic jobs with moderate uncertainty, then track actual-vs-quoted outcomes over several jobs of a similar type. If fixed-price jobs of a certain type consistently overrun, raise the premium for that job type (or move it to day work) rather than guessing again on the next one.

Regulations & Standards