How to Quote a Job Without Underquoting Yourself NZ (2026)

Executive Summary

Key takeaways, what you'll get from this guide

A step-by-step way to build a quote from your real costs, so the number is defensible rather than a gut feel
A worked example showing materials, labour, overheads, contingency, margin, and 15% GST as separate lines
Why margin and markup are different numbers, and how getting them mixed up quietly costs you profit
The difference between a quote and an estimate in New Zealand, and why calling it the wrong thing can lock you into a losing price
The five habits that quietly cause underquoting, and the fix for each
What the rules actually require: the $30,000 written-contract threshold, GST-inclusive pricing, and the taxable supply information a customer can ask for

Underquoting is rarely a pricing decision. It is usually a maths decision made too fast: a number that sounds about right, given without measuring the job, without adding up the real costs, and without a line for the thing that always goes wrong. A job quote is the fixed price you commit to before work starts, and it only protects your margin if it is built from your real costs, materials, labour, overheads, a contingency for the unexpected, and profit, rather than a number that just sounds about right for the job.

Before we get into the method, one thing worth saying: winning work at a fair price is far easier when customers come to you already trusting you, instead of pitting your quote against four others on Builderscrack. Our free Google Business Profile audit shows how easily customers find you in your suburbs, because the tradie who gets found direct is not the one forced to lowball. This guide walks through how to build a quote from the ground up, the habits that cause underquoting, and how to put it in writing so scope creep gets billed instead of absorbed.

A few things the New Zealand rules make clear before you set a price:

A quote and an estimate are not the same thing, and the difference is legally load-bearing. A quote is an offer to do the job for a specified price, and once the customer accepts it you cannot charge more unless they agree to extra work or the scope changes while the job is underway. An estimate is your best guess, and the final price should generally land within 10 to 15% of it 1.

Once residential building work reaches $30,000 or more including GST, you must have a written contract with the homeowner, and you have to give them a consumer protection standard checklist and a disclosure statement before it is signed. You can be fined for not doing so 2.

Whatever number you quote needs to be the figure the customer actually pays. Advertised prices have to be genuine, with no extra costs the customer was not aware of 3, and business.govt.nz lists GST as one of the things a written quote should cover 7. Put the two together and GST belongs in the quoted total, not on the invoice as a surprise. GST in New Zealand is 15% 4.

If the customer is GST registered and the supply is over $200, they can ask you for taxable supply information, and you have 28 days from the request to provide it. Over $1,000 that means the fullest set of details, including their name and an identifier alongside your GST number 5. Building that breakdown into the quote up front saves the scramble later.

What Actually Goes Into a Quote?

A proper quote is the sum of your real costs plus a margin, not a headline figure you reverse-engineer to beat the other bloke. The standard way to price a service job is cost-based pricing: work out every cost involved in doing the work first, then add a bit extra to make a profit, rather than pricing off a gut feel or a competitor's number 6.

Break the real cost into its parts and nothing gets forgotten:

Materials. Every fitting, fixing, consumable, and hire item, priced at what it actually costs you, usually with a markup on top to cover procurement, handling, and the warranty risk you carry on the parts.
Labour. Your hours on the job, priced at a proper charge-out rate, not an employee wage. A charge-out rate carries your ACC levies, KiwiSaver, insurance, your EWRB, PGDB or LBP renewals, the ute and fuel, your test gear, and the non-billable hours you spend quoting and chasing invoices. business.govt.nz puts the starting point bluntly for new contractors: take the rate you would earn from a similar salaried job and add at least 20% 6. If you are still working that number out, see what an electrician should charge per hour in New Zealand, the same maths applies to any trade.
Overheads. The job-specific costs that are not labour or materials: tip and dump fees, parking, scaffold or equipment hire, consent and permit fees, admin time 7. If your charge-out rate already carries your general overheads, only the job-specific ones go here, so you do not count them twice.
Contingency. A line for the unexpected, because the wall is never square and the old wiring is never what the last bloke said it was.
Margin. Your profit, on top of cost. This is the bit that grows the business, buys the next tool, and gets you through a quiet month. Be careful here: margin and markup are two different numbers, and mixing them up is worth real money. More on that under the worked example.
GST. Registration is compulsory once your turnover reaches $60,000 in the last 12 months, or you expect it to in the next 12 9. Once you are registered, 15% on top, quoted inclusive so it never comes out of your own pocket.

Miss any one of those and you are not quoting, you are guessing. The most commonly missed lines are overheads and contingency, and those two are where most underquoting lives.

Action: Write those six headings on a page and treat them as a checklist for every quote. If a line is blank, you have not finished pricing the job.

How Do You Price a Job, Step by Step?

Here is the method, start to finish. Follow the same order every time and the number at the bottom will be one you can stand behind.

Assess and measure the job. Get on site, measure the run, count the points, check access, and note anything the customer forgot to mention. A quote built off a photo and a hopeful guess is the fastest road to underquoting.
List every material at real cost. Itemise the parts, price them at what you pay, and add your markup. A written list means scope creep later shows up against something.
Price the labour at your charge-out rate. Estimate the hours honestly, including setup, clean-up, and travel, then multiply by your real charge-out rate.
Add the job overheads. Tip fees, hire, parking, consent or permit fees, anything specific to this job that your charge-out rate does not already cover.
Add a contingency, then your margin. A contingency covers the surprises, and your margin is the profit on top of cost. There is no official industry percentage for either, so work your contingency out from your own history: go back over your last ten jobs, add up what the surprises actually cost you, and carry that as a percentage of cost.
Put it in writing as a GST-inclusive total, with an itemised breakdown. One clear number the customer commits to, backed by the lines that make it up.

Run those numbers on a simple job and it looks like this. The figures are illustrative, so plug in your own:

Line	Amount
Materials (at cost)	$600
Labour (16 hours at a $75 charge-out rate)	$1,200
Job overheads (tip fees, parking, consumables, hire)	$120
Contingency (10% of cost)	$192
Markup (15% added on top of cost and contingency)	$317
Subtotal	$2,429
GST (15%)	$364
Total quoted (GST-inclusive)	$2,793

Now the bit that costs tradies the most money without them noticing: margin and markup are not the same number. Markup is a percentage you add on top of your cost. Margin is the share of the final price that ends up being profit. In the table above, $317 is a 15% markup on the $2,112 of cost and contingency, but against the $2,429 subtotal it works out at a margin of about 13%. Add 15% and you do not get a 15% margin, you get less.

The conversion is worth memorising, because it runs the wrong way to instinct. A 20% markup leaves you a margin of about 17%. To actually keep a 20% margin you need a 25% markup, and for a 30% margin you need a markup of about 43%. If you have been adding 20% for years thinking that is your margin, you have been running several points thinner than you believed. Decide which number you are aiming at, then do the sum in that direction.

Notice too that the labour line is a charge-out rate, not a wage. That single distinction is where most new operators go wrong: they price their hours at what an employer once paid them, forgetting that as the business they now carry the ACC levies, the insurance, the ute, and every unpaid hour spent quoting and driving.

Action: Build your next quote line by line in this order. Keep the breakdown even if the customer only ever sees the total, because you will need it the moment anyone questions the price or asks for taxable supply information.

Quote or Estimate: Which Are You Actually Giving?

This is the part New Zealand tradies get burned on most, and it costs more than any single missed material line.

A quote is an offer to do a specified job for a specified price. The moment the customer accepts it, that price is locked. You cannot charge more unless they agree to extra work, or the scope of the job changes while it is underway 1. So a quote given off a two-minute look at the driveway is not a rough figure you can revise later, it is a commitment.

An estimate is your best guess at the cost, and the final price can land above or below it, though as a general guide it should be within 10 to 15% 1. An estimate can be verbal or written, and there is no legal difference between the two.

Two things follow from that. First, if the job carries real unknowns, say the word "estimate", say it out loud, and put it on the paperwork, because calling it a quote locks you into a number you cannot yet stand behind. Second, if you do quote, quote properly, because you are giving away your right to correct the figure later.

And if you set no price at all? The Consumer Guarantees Act says the customer only has to pay a reasonable price, judged against what other local providers charge for similar work 8. That is a decision made by comparison rather than by you, which is a poor way to run a business.

Action: Add the word "Quote" or "Estimate" to the top of your template, and pick the right one deliberately on every job rather than by habit.

Why Do Tradies Underquote?

Underquoting is almost always one of five habits, not a market that will not pay. Name the habit and you can fix it.

Eyeballing the job instead of measuring it. A number pulled from a glance at the driveway is a number that misses the hard bits. Measure and count before you price.
Forgetting overheads, ACC, and KiwiSaver in the day rate. Pricing your labour at an employee wage instead of a charge-out rate means every hour on site quietly loses money on the costs an employer used to cover.
No contingency line. With nothing set aside for the wall that is not square or the wiring that is not to code, the first surprise eats your profit and the second eats your wage.
Matching a competitor's lowball number. Their price is built from their costs, not yours, and you have no idea what corners it assumes. Racing a rival to the bottom just means you both lose money faster.
Not itemising, so scope creep goes unbilled. Without a written breakdown, every extra the customer asks for feels like part of the original job, and you do it for free rather than have the awkward conversation.

The thread running through all five is the same: a number produced too quickly, with no working behind it. Slow the quote down and every one of these disappears.

Action: Take your last three quotes and check each against this list. If you underquoted, one of these five is almost certainly why, and now you know which one to fix.

Should You Put It in Writing?

Yes, always, and not only because it looks professional. A written quote is where the rules and your margin meet.

Put the whole job on paper. A good written quote covers how long the work will take, your labour charge, the cost of every supply including fixtures and fittings, any subcontractor costs, extras like consent or permit fees and admin, GST, your markup, and your payment terms 7.
Quote the total, GST-inclusive. Advertised prices must be genuine, with no extra costs the customer was not aware of 3, and GST is on business.govt.nz's list of what a quote should cover 7. Quote inclusive and the 15% never comes out of your pocket.
Know the $30,000 line. Residential building work at $30,000 or more including GST needs a written contract, plus a consumer protection standard checklist and a disclosure statement handed over before signing. Skipping those can attract a fine 2.
Be ready to itemise. A GST-registered customer can request taxable supply information on any supply over $200, and you have 28 days to provide it 5. Build the breakdown into the quote and you are never caught scrambling.

On deposits, New Zealand has no statutory cap for trade work, but Consumer Protection tells homeowners there is no legal requirement to pay a deposit at all, and that if they are asked for one they should not pay more than 10% of the total cost 1. That is the number your customers have been told to expect, so asking for much more reads as a red flag whether you meant it that way or not.

Action: Turn your quote template into one that always shows a GST-inclusive total plus an itemised breakdown, with the deposit set at no more than 10%.

How Do You Stop Scope Creep Eating the Job?

Scope creep is the slow leak that turns a well-priced quote into a loss. The customer asks for "just one more" power point, then a second, then a tidy-up that was never in the job, and because none of it was written down, it all gets done for free.

The fix is the itemised quote you already built. Because an accepted quote is a fixed price you cannot exceed unless the customer agrees to extra work or the scope changes 1, that written list is the only thing that defines where the original job ends. Anything outside it is visibly an extra, and an extra gets a variation: a short written note of the added work and its price, agreed before you do it. It does not need to be formal. A text message that says what the extra is and what it costs, with a yes back, is enough to stop the free-work spiral.

This is also why the itemised breakdown matters beyond the paperwork. The same list that satisfies a taxable supply information request is the list that lets you say, plainly and without friction, "that one is outside the quote, here is what it adds."

Action: Decide your rule now: no work outside the written quote without a written variation and a price the customer has agreed to. Put that line on the quote itself so nobody is surprised.

How Do You Win Work Without Being the Cheapest?

A fair quote only works if you are not forced into a bidding war to win the job. The tradie who competes on price against four others on Builderscrack has already lost margin before they start. The tradie a customer found directly, read good reviews about, and trusts, is booking the job, not haggling over it.

That comes down to being easy to find and easy to choose. A complete Google Business Profile, a steady flow of reviews, and a simple website with a page for each service you offer will do more to protect your prices than any quoting trick, because a customer who came to you is far less price-sensitive than one comparing five faceless quotes. For the full picture on getting found, start with our Google Business Profile guide for New Zealand tradies.

What a tradie website costs

Single Page$1,099
one page, conversion sections, Call + Get a quote
Multi-Page$2,199$1,899Founding Offer
Home, About, Reviews, Contact + page per service
Multi-Page + Extras$3,299
above + ~10 suburb pages + Google Business Profile optimisation

Maintenance: optional $50/month for edits on existing pages (what maintenance covers)

Free strategy call →

A 20-minute call and a plan for more leads. No sales pitch.

Action: Set up and verify your Google Business Profile this week, then get a proper mobile-first website live, so the work that finds you comes from people ready to book at your price, not shop yours against the cheapest bidder.

Want Someone to Check How You Show Up?

Pricing right is only half the battle. The other half is being the tradie customers find and trust before they ever ask for a quote. Made 4 Tradies offers a free, no-obligation audit for New Zealand trade businesses.

Free Google Business Profile audit: we check whether you appear on the map for your trade in your suburbs, your review profile, and what is costing you the free calls. PDF in 24 hours.
Free website audit: if you have a site, we check whether it is built to turn searches into booked jobs, or quietly sending them to a competitor.

No call required. No pitch. Just a straight read on what is costing you work.

Frequently Asked Questions

How do you quote a job without underquoting?

Build the price from your real costs rather than a gut feel. List materials at cost with a markup, price your labour at a proper charge-out rate that covers ACC, KiwiSaver and your overheads, add a contingency for surprises, then add your margin and GST. Measure the job before you price it, and put the number in writing so extras get billed as variations.

What should be included in a job quote in New Zealand?

business.govt.nz suggests covering how long the work will take, your labour charge, the cost of all supplies including fixtures and fittings, subcontractor costs, extras like consent or permit fees and admin, GST, your markup, and your payment terms. Show it as a single GST-inclusive total backed by an itemised breakdown, so you can answer a price query or a taxable supply information request without scrambling.

What is the difference between a quote and an estimate?

A quote is an offer to do the job for a specified price, and once the customer accepts it you cannot charge more unless they agree to extra work or the scope changes while the job is underway. An estimate is a best guess, and the final price can be higher or lower, though it should generally land within 10 to 15%. Choose the right word deliberately, because a quote gives away your ability to revise the figure later.

How much contingency should I add to a quote?

There is no official industry percentage, so work it out from your own jobs rather than copying a number off the internet. Go back over your last ten jobs, add up what the surprises actually cost you, and carry that as a percentage of cost. Renovation and repair work on old buildings warrants more, because what is behind the wall is rarely what you were told, and a clean new-build job with full access can carry less. The point is to have a line for the unexpected at all, rather than absorbing every surprise out of your margin.

What is the difference between margin and markup?

Markup is a percentage you add on top of your cost. Margin is the share of the final price that is profit. They are not the same number, and adding 15% does not leave you a 15% margin, it leaves you about 13%. To keep a true 20% margin you need a 25% markup, and for a 30% margin you need about 43%. Decide which number you are aiming at before you pick a percentage, because assuming markup and margin are interchangeable quietly costs you several points of profit on every job.

Do I need a written contract for a job in New Zealand?

For residential building work costing $30,000 or more including GST, yes. You must have a written contract with the homeowner, and you must give them a consumer protection standard checklist and a disclosure statement before it is signed, with a fine possible if you do not. Below that threshold a written contract is not mandatory, but a written quote is still best practice on every job.

Should a quote include GST?

Yes, if you are registered for GST. New Zealand GST is 15%, and registration is compulsory once your turnover reaches $60,000 in any 12-month period. Advertised prices must be genuine with no extra costs the customer was not aware of, so quote the GST-inclusive total rather than adding the 15% at invoice time.

How big a deposit can I ask for?

New Zealand has no statutory deposit cap for trade work, but Consumer Protection advises homeowners that there is no legal requirement to pay a deposit at all, and that if asked for one they should not pay more than 10% of the total cost. That is the expectation your customers arrive with, so anything much above 10% will cost you trust even when the job justifies it.

How do I stop scope creep from eating my margin?

Start from an itemised written quote, so the original scope is a clear list. An accepted quote is a fixed price you cannot exceed unless the customer agrees to extra work or the scope changes, which means anything beyond that list has to become a variation: a short written note of the extra work and its price, agreed before you do it. A text with the added item, the cost, and a yes back is enough to stop doing extras for free.

References:

This is general information for New Zealand trade businesses, current as of 2026. It is not legal, tax, or financial advice. Contract thresholds, deposit guidance, and tax rules change, so confirm the current figures with the official source linked and speak to a chartered accountant about your own situation.

Published by Made 4 Tradies. Kiwi-owned, run by a Hawke's Bay local. Serving Auckland, Wellington, Christchurch, and nationwide.

How to Quote a Job Without Underquoting Yourself (NZ)