This has got to be the most asked question on PATTA forums and Facebook groups – how much do I charge per item?

Everyone wants to know how much everyone else is charging, when what they should be doing is concentrating on working out the best price to charge for them.

I can’t tell you what to charge, and what I charge may not work for you. 

To be competitive in the PAT testing industry you need to know what your local competitors are charging, and compete with them. You don’t need to undercut them, you just need to be able to sell your service better than they sell theirs. There are PAT companies out there that win business despite charging more, because they are better at selling. You need to learn to sell, if you don’t already know, if you want to have a successful PAT Testing business.

PAT testing costs a range of price, from the lowest on around 50p per item to those commanding three or four pounds each item, there’s a big range; the UK average is around £1.20 per item.

However the price varies for all kinds of factors including location and what the job is – an office job or an empty school is a lot quicker to do than a building site or factory so will command a bigger discount.

If you are new and can only test 5 items an hour you’ll be charging more than an old hand doing 30 items an hour.

At the end of the day, what you charge is down to you, but don’t ever think there is just one price. This is business and every product has a different cost and associated costs. If you’ve checked out our Sole Trader excel template you will know there are all kinds of costs to consider before pricing a job, and you do need to take all this into account. Using that template once you have an hourly rate, you’ll know what you can do in that hour, so you can work out what your price per item is.

If your hourly rate is £50.00 and you can test 40 items, then you’re charging £1.25 per item, but if you can only test 10 items then you’re going to be charging £5.00 – but that’s not competitive so how do you sell that to your clients? Well that’s where you sales skills come in, and we can’t teach you that.

Let’s consider a more reasonable hourly rate of £30.00 and you can test 40 items, then you’re charging £0.75 per item, but if you can only test 10 items then you’re going to be charging £3.00 – it’s getting better, but you have to think about competition and what they can quote – this tells you you need to get quicker. You need experience; a PAT tester who trains then sets up a business is going to struggle, you need to get experience first. So join an existing company and get paid to test, whilst building up your skill and speed, so when you do go on your own you can offer a more competitive price to your clients.

When I started testing back in 2009 I got a job working for a company as a sub-contractor and they paid me 50p per item; that was an incentive to learn to work harder and faster. 

Also think of your initial costs – you have to get to the job, so you need to consider the travel time, which is why most companies charge an initial fee – a fixed price for a set number of items, e.g. 85 for the first 20 items, so that’s 20 items when on site, plus travel costs all covered, so turning up at the client your time is covered. If you’re testing 20 items an hour at £1.50 per item, that’s £30.00 for your hour on site, plus £55.00 for the travel – that’s an excellent rate of pay. If that site has 100 items, you’re there 5 hours and come out with £205.00.

So how do you work out your price per hour?

How much do you want to earn in a year? How much do you need to earn in a year? Let’s say £30,000.00 for arguments sake.

How many days a week are you going to work, or hours a week? Let’s say 35 hours a week, that’s 1680 hours in the year (allowing for 4 weeks holiday). So your hourly rate is £17.88. You know you can do 20 items an hour, so that’s 89p per item.

But that’s not what you charge; that’s the minimum you can make per hour to meet your target income, but you have costs to consider, to come off your total.

You worked out in the Cost Calculator what it’s going to cost you to trade for a year.

Let’s say your annual costs are £7000.00 and you work 35 hours each week, if you want the business to earn £30.00 an hour you’re going to need to charge £1.55 per item. After all your costs, your income will be about £16.70 per hour. Which is around £28,000 per annum.

Forgetting about costs for a while, another way to consider it is this –

How much do you want to make a year? £30,000.00

How much do you want to make an hour? £30k / 1680 hours (35 hour week) = £17.88 ph

How many items can you test in an hour? 20 = 89p per item

Let’s do that again…

How much do you want to make a year? £40,000.00 – to cover business costs too

How much do you want to make an hour? £40k / 1680 hours (35 hour week) = £23.80 ph

How many items can you test in an hour? 20 = £1.19 per item

Now lets say you’re getting quicker and can do 30 items an hour –

You can either charge 79p per item or you can make more – £1.19 x 30 = £35.70 per hour, which is £59,976 pa.