What goes into a project quote?
A project quote is the price you offer a client for a defined piece of work. A quote that holds up starts with direct costs — the hours you will spend and the materials you will buy — then adds a share of overhead for running the business and a profit on top.
Formulas
Direct costs = hours × rate + materials + other expensesCost = direct costs × (1 + overhead ÷ 100)Quote = cost × (1 + profit ÷ 100) × (1 + tax ÷ 100)
Worked example
80 hours at 45.00 is 3,600.00 of labour. With 1,200.00 of materials and 300.00 of other expenses, direct costs are 5,100.00. Overhead adds 510.00 and profit 1,122.00, for a quote of 6,732.00.
How to use the project cost quote calculator
- Enter your figures: labour hours and hourly rate. Materials, other expenses, overhead, profit on cost and tax are optional and count as zero when left empty.
- Read the result. It updates as you type, so there is no button to press.
- Try other numbers to compare scenarios. Reset brings back the example values.
Getting it right
- Estimate hours task by task and add them up; a single guess for the whole project is nearly always too low.
- Overhead covers what you cannot bill directly: software, insurance, rent and unbilled admin time.
- Add a contingency to the hours for work that is hard to scope, and say in the quote what is and is not included.
Frequently asked questions
How do I estimate the cost of a project?
List the tasks, estimate the hours for each, multiply by your rate, add materials and expenses, then apply overhead and profit percentages. The result is your pre-tax quote.
What is the difference between a quote and an estimate?
An estimate is an informed guess that may change as the work becomes clearer. A quote is a fixed price for a stated scope, and once accepted it is normally binding.
What overhead percentage should I use?
Divide a year of overhead costs by a year of direct costs. Small service businesses commonly land between 10% and 30%.