What are fixed costs for a tradesperson?

Fixed costs remain the same regardless of how many jobs you do: van finance/lease, insurance premiums, tool subscriptions, phone contracts, marketing spend, software, and accountancy retainers. These must be paid whether you work or not.

What are variable costs?

Variable costs change with each job: fuel for travel, materials purchased, waste disposal, and any per-job expenses. The more jobs you do, the higher your variable costs, but they only occur when you are working.

What is the contribution margin?

Contribution margin is your day rate minus variable costs per day. This is the amount each working day "contributes" towards covering your fixed costs. Once fixed costs are covered, the contribution becomes profit.

What is a healthy safety margin?

A safety margin above 30% is healthy, meaning you can afford to lose nearly a third of your working days and still break even. Below 15% is risky - one quiet week could put you in the red. Consider raising your rates or reducing costs.

How can I lower my break-even point?

Either reduce fixed costs (cheaper van deal, shop around for insurance, cut unnecessary subscriptions), reduce variable costs (better fuel economy, less waste), or increase your day rate. Even small reductions across multiple categories add up significantly.

TradeCalculator

Break-Even Calculator

Find out how many days per month you need to work to cover all costs

Day Rate

How We Calculate This

Enter your day rate and all monthly fixed costs (van, insurance, tools, phone, marketing). Add your variable costs per working day (fuel, materials). The calculator determines your contribution per day (day rate minus variable costs), then divides monthly fixed costs by this contribution to find the number of days needed to break even. It also shows the safety margin based on typical working days.

Frequently Asked Questions

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Last updated: March 2026

All calculations are estimates. Verify with your supplier.