Every trip to the supplier, every dollar you float on a customer's gear, every faulty part you have to return — that is real time and real risk. Material markup is how you get paid for it. The trick is charging a fair amount and not confusing markup with margin.
Why you charge markup at all
Customers sometimes reckon they could "just buy the materials themselves." They can — but then they also wear the sourcing, the running around, the warranty chase-ups and the risk of buying the wrong thing. When they hire you, they are paying for all of that to disappear. Markup is what covers it:
- Sourcing time — pricing, ordering, driving to the supplier, waiting at the trade desk.
- Cash flow — you pay for the gear up front and carry it until the invoice is paid.
- Risk & warranty — if a part is faulty, you are the one returning it and re-doing the work.
- Storage & wastage — offcuts, consumables and the bits that never quite get used.
What a fair markup looks like
There is no single legal or "correct" number — it depends on your trade and the item. As a rough guide:
- 10–15% — big-ticket items where the dollar markup is already decent (e.g. a $2,000 unit).
- 15–25% — the everyday middle for most general materials.
- 25–40%+ — small, fiddly or specially-ordered bits that take disproportionate time to source.
Free Job Pricing Calculator
Enter your material cost and markup and it works the sell price out instantly — then folds it into the full job price alongside labour and margin.
Open the free toolThe markup vs margin trap
This is the one that quietly costs tradies money. Markup is the percentage you add on top of your cost. Margin is the percentage of the final price that is actually profit. They are not the same number.
Bottom line: if you think in markup but promise yourself a margin, you will always come up short. Pick one language and stick to it.
Make it automatic
The tradies who never leave money on the table are not doing fancy maths — they just apply the same markup rule to every job, every time, instead of guessing on the fly at 9pm. Set your standard markup, run it consistently, and review it once a year against your supplier prices.
Frequently asked questions
Most Australian tradies mark materials up between 10% and 30%. Around 15–20% is a common middle ground. Small, fiddly or specially-ordered items often carry a higher markup because they take more time to source relative to their cost.
Yes — it is standard practice, not gouging. The markup pays for your time sourcing and collecting gear, the cash you float buying it, warranty and returns hassle, and the risk you carry if something is faulty. Passing materials through at cost means you are working those hours for free.
Markup is the percentage you add to your cost. Margin is the percentage of the final price that is profit. A 20% markup is only about a 16.7% margin. Mixing them up is one of the most common ways tradies undercharge without realising.
You do not have to itemise it. Most tradies quote a single materials figure (cost plus markup already baked in) or a fixed price for the whole job. Customers are paying for the finished result, not a shopping receipt.
Never forget the markup again
Admin Substitute applies your material markup automatically on every quote, adds labour, overheads, margin and GST, and sends a clean professional quote your customer can accept on the spot.
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