What is the difference between fixed price and day rate when hiring a tradesman

When you hire a tradesman to do some work there are 2 different ways they will price the work

These are fixed price or day rate

The easiest way to differentiate these is by the risk involved

On a fixed price the tradesman assumes the risk

On a day rate you assume the risk


Let’s use the example of £200 per day

Imagine you had some plastering to be done

The plasterer may think he can do it in 5 days so gives you a fixed price of £1000

Once he starts he may find the walls are not in as good a condition as he thought and he has to repair them before he can plaster them

He might have a delay in plaster being delivered

His van might break down and he loses half a day

The job might end up taking him 8 days

But he took it on a price so can’t ask you for more money

On the other hand he might have flown through it and finished in 3 days. In this case you still have to give him £1000

And you cant complain that he finished it too quickly and you want to give him less money for it


Now suppose he took it on a day rate

Instead of finishing it in 5 days he takes 8

You now have to give him £1600

There is nothing you can do about it as you assumed the risk

You cant say he should have finished it in 5 days

But if he finishes in 4 days it only costs you £800


That’s why 2 builders will give different quotes for the same piece of work

Its important before starting a project to decide if you will be asking for tenders based on a fixed price or a day rate

You should first do some research into the rates tradesmen charge

You may prefer price work even though it may seem more expensive,  at least you will know your total costs before you start

If you choose to hire people on a day rate  then it’s up to you to push the work along quickly without making mistakes or compromising on quality

There is nothing wrong with either method but its important to understand the differences between hiring a tradesman on a fixed price or day rate

If you would like any help with the above subjects please contact us

Leave a Reply

Your email address will not be published. Required fields are marked *

You may use these HTML tags and attributes:

<a href="" title=""> <abbr title=""> <acronym title=""> <b> <blockquote cite=""> <cite> <code> <del datetime=""> <em> <i> <q cite=""> <s> <strike> <strong>