The Overheads Trap: How to Calculate a Day Rate That Actually Pays You
29 June 2026
Ask most sole-trader contractors what their day rate is and they'll tell you what they want to earn — not what their business actually costs to run. That gap is the single biggest reason hard-working trades end the year wondering where the money went.
The pain point: your van isn't free
Insurance, fuel, accountant fees, phone, tools, public liability, professional memberships, the lockup, the website, the new ladder — none of those show up in your quoted day rate, yet all of them have to be paid out of it. If you bill £280 a day and your overheads are £14,000 a year, you're effectively working the first 50 days of the year just to keep the lights on. Most contractors have never done the maths.
Why ignoring overheads costs you money and reputation
Financially, it's obvious: you under-recover, so every "good year" is actually a break-even year wearing a wig. Reputationally, the damage is slower. Under-recovering contractors burn out, cut corners on materials to protect take-home, and start chasing cash work to plug the gap. That's the route from "trusted local trade" to "stopped answering the phone" in eighteen months flat.
Why "I'll just charge more" doesn't fix it
Pulling a number from the air doesn't recover overheads — it just makes you feel better for a week. You need a daily recovery rate built from real numbers, not a competitor-matching exercise.
Four steps to a real daily recovery rate
1. Add up every annual overhead
Van costs, insurance, fuel, phone, software, accountant, tools depreciation, training, memberships, pension, sick-day buffer. Don't forget the small monthly direct debits — they add up to a holiday's worth of money.
2. Work out your real billable days
You don't bill 365 days. Subtract weekends (104), holiday (20), bank holidays (8), quoting and admin days (roughly 30), sick days (5), and weather/no-show days (10). That leaves around 188 truly billable days for a sole trader.
3. Divide overheads by billable days
£14,000 ÷ 188 = £74.50. That's the amount every single billable day needs to recover before you've earned a penny of take-home. Add that to your desired daily wage — that's your minimum quoted day rate.
4. Reprice annually, not "when it feels right"
Overheads creep. Diesel, insurance, and software all moved in 2025; if your day rate didn't move with them, your margin shrank. Lock in a review every January.
The QuoteKing solution
QuoteKing handles overhead recovery as a first-class line, not an afterthought. In Settings you set your daily overhead recovery once. Every quote — whether you type the line items or let QuoteKing draft them from a description — automatically includes an overhead row scaled to the job's duration. If a kitchen takes six days, that's six days of overhead recovered, not zero.
Combined with VAT handling, deposit links, and follow-up nudges, this means the price you quote is the price your business actually needs — not the price you hoped would win the job.
Stop subsidising your own business
Your day rate isn't your wage. It's your wage plus the cost of being in business. Quote the second one, every time.