Is your materials markup right as a plumber?
The markup on materials looks like pure profit. But waste, trips to the merchant, returns, stock in the van and money tied up all have to be paid from it too. Check it in 2 minutes.
2026/27 tax year
With typical figures a plumber only earns £2,036 a year on materials excl. VAT and before tax, once waste, time, storage and interest are paid. Change the numbers to your own below.
Step 1 of 4 · Purchases
Example: a plumbing and heating firm with one employee buying pipe, fittings and sanitaryware for £35,000 a year. Enter your own figures.
What the merchant invoices you after discount. It is in your accounts or on your trade account statement.
Off the merchant's list price.
Materials earn you a year, excl. VAT and before tax
£2,036/year
After tax: £1,507 (income tax and Class 4 NICs about 26% at a typical income in the trade)
You earn a little, but below Bidmio's recommended markup of 24–39 %.
- Your markup
- 20.0 %
- As a margin that is
- 16.7 %
- Markup that just covers it
- 14.0 %
- Bidmio's recommendation
- 24–39 %
What the markup has to pay for
Your markup in pounds: £6,790
- Time on materials (88 h a year)£2,904
- Waste and shrinkage£1,050
- Storage and van stock£800
The recommendation is Bidmio's estimate: a markup that covers every cost plus 10 to 25 percentage points, but not above the merchant's list price.
Guide figures only, errors excepted and without guarantee. The numbers show what a healthy, profitable business needs.
Markup or margin?
Markup is worked out on the cost price, margin on the selling price. That is why a 25% markup is only a 20% margin, and why many think they earn more than they do.
- Markup = (selling price − cost price) ÷ cost price
- Margin = (selling price − cost price) ÷ selling price
- Margin = markup ÷ (1 + markup)
- Markup = margin ÷ (1 − margin)
Buy for £1,000 and add 20.0%, and you sell for £1,200 excl. VAT. The £200 is 20.0% of the cost price but only 16.7% of the selling price.
| Markup | Margin |
|---|---|
| 10.0 % | 9.1 % |
| 15.0 % | 13.0 % |
| 20.0 % | 16.7 % |
| 25.0 % | 20.0 % |
| 30.0 % | 23.1 % |
| 33.3 % | 25.0 % |
| 50.0 % | 33.3 % |
| 100.0 % | 50.0 % |
Want a 25% margin? Add 33%, not 25%.
What does the customer pay?
For goods you buy for £10,000 excl. VAT at the merchant:
- Your price excl. VAT
- £12,000
- + VAT 20%
- £2,400
- The customer pays incl. VAT
- £14,400
- The same goods at the merchant's list price, incl. VAT
- £17,143
Your price is 16% below the list price. You pass £7,760 of your discount on to customers every year.
Your customers pay £48,888 incl. VAT a year for materials. If you are VAT-registered the VAT is not yours: it goes to HMRC.
Homeowners should always be given the price incl. VAT.
See the markup on every materials line
In Bidmio you build the quote from lines in your price list. Each materials line has your trade price and your markup, the customer only sees the selling price, and on the job you see whether you make money on materials or on the hours.
See quotes in BidmioBidmio for plumbers
From the first call to the paid invoice: quotes, timesheets, materials and invoices in one system, made for plumbers. See how it fits together in an ordinary week.
Your body is your most important tool, and you can't buy a new one
Being a tradesperson is hard physical work. Knees, back and shoulders do not last 50 years on ladders and scaffolding, and nobody pays you when they say stop. Your rate has to pay for that while you still can.
- 68Born after 5 April 1978? Under today's law your State Pension age is 68, and for those born in the year before it lies between 67 and 68, phased in from 2044. For people born from 6 March 1961 to 5 April 1977 it is 67. The next review could move it again.
- 41,000construction workers in Great Britain suffer from a work-related musculoskeletal disorder: 53% of all work-related ill health in the sector, and 2.0% of its workers against 1.2% across all industries (HSE, average 2022/23 to 2024/25).
- £0Statutory Sick Pay (£123.25 a week from the first day off in 2026/27) is for employees only. Off sick as a sole trader, your income stops the same day unless you pay for income protection yourself.
- 0%No employer pays into your pension. An employee is auto-enrolled with at least 8% of qualifying earnings, 3% of it from the employer. You only get what you build into your own rate.
Do the maths: to stop at 63 instead of 68 you have to fund 5 years without pay. At £2,000 a month that is £120,000 before tax and inflation, and the State Pension, at most £241.30 a week, does not start until 68. That money only comes from one place: your rate in the years your body can still do the work.
Underpricing is not the way to a good life. Every hour you sell too cheaply, you pay for later with your body, your pension and your time off.
Where do the numbers come from?
Every number in the check is either an official UK rate or an estimate that we label as one. Open a field to see why, with an example from real life.
Materials bought a year
All the materials you buy for customers in a year, excl. VAT and after your discount. It is in your accounts as cost of sales or on your merchant's statements. The default is Bidmio's estimate for a small firm with one employee.
Real life: An electrician buying £28,000 of materials with a 20% markup thinks materials earn £5,600 a year. The check shows what is left once waste, time and interest are paid.
Bidmio's estimate from typical figures. Change it to your own.
Trade discount
The merchant has a list price anyone can see, and you buy on a trade account at a discount. The discount is your income as long as you do not give it away. The default per trade is Bidmio's estimate.
Real life: With a 30% discount and a 20% markup, the customer pays 16% below list price. You have given away more than half your discount.
Bidmio's estimate from typical figures. Change it to your own.
Markup on materials
Markup is what you add to your trade price, as a percentage of that price. Margin is worked out on the selling price, so a 20% markup is only a 16.7% margin. The default per trade is Bidmio's estimate.
Real life: A joiner who wants a 20% margin on timber has to add 25%, not 20%. Otherwise he is £50 short on every £1,000 of timber.
Bidmio's estimate from typical figures. Change it to your own.
Waste and shrinkage
Offcuts, damaged goods, leftovers that cannot be returned and the last litre in the tin. It is bought, but no customer pays for it unless you price it into the quantities. The default per trade is Bidmio's estimate.
Real life: A bricklayer who buys £2,000 of facing bricks for a wall and loses 8% to cuts and breakages has paid £160 for bricks nobody sees on the invoice.
Bidmio's estimate from typical figures. Change it to your own.
Time on materials
Ordering, trips to the merchant, queuing at the trade counter, returns, faulty goods and checking invoices. Only count the time the customer does not pay for in your hours. With 44 working weeks, 2 hours a week is 88 hours a year. The default is Bidmio's estimate.
Real life: A run to the merchant for forgotten fittings takes 45 minutes. Three times a week that is over 2 hours the markup has to pay for.
Bidmio's estimate from typical figures. Change it to your own.
Show 5 more explanations
What an hour costs you
Time on materials costs what an hour costs the firm. The figure comes from the employee check: an employed tradesperson's cost per billable hour with holiday pay, employer's NICs and pension. If you work alone, it is the hour you cannot bill instead.
Real life: An employee collecting materials 2 hours a week at £34 an hour costs about £3,000 a year: more than the markup on many small jobs.
Storage and van stock
Racking in the van, a lock-up or storage unit, items that go missing or get broken, and stock kept so long it cannot be returned. The default is Bidmio's estimate.
Real life: A plumber with £3,000 of fittings in the van who loses or damages 10% a year has £300 of shrinkage before the racking is paid for.
Bidmio's estimate from typical figures. Change it to your own.
Credit on your trade account
Merchants usually give 30 days from the end of the month of the invoice. Between businesses, the law makes a payment late 30 days after the invoice unless you agreed terms; agreed terms should normally be no more than 60 days.
Real life: On 30 days end of month, goods bought on the 1st are paid about 60 days later, goods bought on the 30th after about 30 days. On average about 45 days.
Days from purchase until payment
From buying the goods the job has to be done, invoiced and paid. If a business customer pays late, you can claim statutory interest of 8% plus the Bank of England base rate: 11.75% a year in the second half of 2026. Homeowners only owe interest if your terms say so.
Real life: A bathroom where you buy in week 1, finish in week 3 and get paid 14 days after the invoice ties the money up for about 35 days. With 30 days' credit at the merchant, you fund 5 days yourself.
Overdraft interest rate
Money tied up costs overdraft interest or is missing from the account. Bank Rate is 3.75%, but a small firm's overdraft usually costs much more. 9% is Bidmio's estimate, so check your own rate with the bank.
Real life: £28,000 of materials you fund yourself for 15 days at 9% costs about £100 a year. It grows quickly with customers who pay late.
All sources
- ONS: Annual Survey of Hours and Earnings 2025 (provisional), Table 14, pay by occupation
- HMRC: Rates and thresholds for employers 2026 to 2027 (NICs, minimum wage, SSP, Employment Allowance)
- GOV.UK: Late commercial payments, interest and debt recovery (8% + base rate, £40 / £70 / £100)
- Bank of England: Bank Rate 3.75% (unchanged since 18 December 2025)
2026/27 tax year
Rates change every tax year on 6 April, and some at the Budget. We update the figures once the new rates are published, but always check your own numbers with your accountant.
What is the difference between markup and margin?
Markup is the profit as a percentage of the cost price, margin is the profit as a percentage of the selling price. Buy for £100 and sell for £125, and the markup is 25% but the margin only 20%.
Why does time on materials count?
Ordering, trips to the merchant, returns and checking invoices take time. If the customer does not pay for that time in your hours, the markup on materials has to.
Where does the recommended markup come from?
It is Bidmio's estimate, not an industry statistic: the markup that covers waste, time, storage and interest, plus 10 to 25 percentage points, but not above the merchant's list price, which customers can find themselves.
Can I charge more than the list price?
Yes, the price is yours to set. But homeowners should get the price incl. VAT, and many check list prices online. If your markup is high, explain what it covers: guarantee, delivery and your time.
Do you store my numbers?
No. Everything is calculated in your browser and nothing is sent to a server. The share link only contains purchases, discount, markup, waste and hours.
Disclaimer
All calculations are a guide only and may contain errors. Bidmio gives no guarantee for the result, and the calculation is not tax, accounting or legal advice. The figures show what it takes to run a healthy, profitable business on the assumptions you entered and typical UK rates for 2026/27. Your own situation may differ, so always check the figures with your accountant before making decisions.