Pricing and business
Job price: labour by area, materials markup and VAT
- where
- price before VAT (£)
- area to tile (m²)
- labour rate (£/m²)
- materials cost to you (£)
- markup on materials (%)
- extras such as prep and waste removal (£)
- VAT charged (£)
- VAT rate (%): 20 standard, 0 if not registered
- price including VAT (£)
Explain this equation
Builds a quote from the area, your labour rate per m², marked-up materials and any extras, then adds VAT if you are registered. Use it for written quotes and estimates.
A × r is your labour. M is what the materials cost you; the markup mk covers your time buying, collecting and the risk of breakages. E covers anything priced separately, such as stripping out or levelling. v is the VAT rate: 20% standard, or 0 if you are not VAT registered.
The markup is applied as a multiplier on cost, so 15% means materials are charged at 1.15 times cost. VAT is calculated on the whole net price, labour and materials together.
Sense check: 12 m² at £30/m² is £360; £400 of materials at 15% is £460; net £820, VAT £164, total £984.
Watch out: always tell a domestic customer whether the price includes VAT. Work between VAT-registered contractors may fall under the reverse charge.
Builds a quote from tiled area, your labour rate per m², marked-up materials and any extras, then adds VAT if you are registered.
Enter your values to see the result.
Good to know
The standard VAT rate is 20%. You must register for VAT if your taxable turnover over the last 12 months goes over £90,000 (or you expect it to in the next 30 days). If you are not registered, set the VAT rate to 0 and do not charge VAT. Some jobs (for example certain work for disabled people, or new-build dwellings) can be zero-rated or reduced-rated; check HMRC guidance before quoting.
Common mistake
Quoting a VAT-registered price to a domestic customer without saying whether VAT is included. Always show the VAT amount and the total.
Limits
Simple job costing. It does not handle the VAT Flat Rate Scheme, the construction industry reverse charge (which applies between VAT-registered contractors under CIS) or retentions.
Sources
Results are calculations from the published methods and manufacturer figures shown, and depend on the data you enter. Always follow the tile, adhesive and grout manufacturers’ instructions, BS 5385 and the Tile Association guidance. Coverage rates vary by product and substrate. Check prices and VAT rules with your own records and HMRC.