Short answer: price a PPM contract from the bottom up. Count the visits in the schedule, the hours on site and in travel for each, and multiply by what an engineer's hour costs you. Add mileage, consumables, office time and a share of overheads. Then divide by one minus your target margin, not multiply by a markup. Test the price against visits that run long before you send it.
The five numbers you need
| Input | How to work it out | Example figure (an assumption, not a benchmark) |
|---|---|---|
| Engineer cost per hour | A year's cost of the engineer (pay, employer costs, pension, van, tools, phone, training) divided by the hours they actually spend on jobs and travelling in a year, after holidays, training, sickness and waiting time | £52,800 ÷ 1,760 hours = £30.00 |
| Hours per visit | Time on site from the schedule, plus travel there and back | From 1.0 to 9.0 hours on site, plus 1.0 hour travel |
| Mileage cost | Fuel and wear per mile, if not already in the hourly cost (do not count the van twice) | £0.20 a mile, 30 miles a round trip |
| Consumables and small parts included | What the contract says is included, priced at your cost | £180 a year |
| Overheads | Insurance, software, accreditation, premises: a share of the year's total, often as a percentage of direct cost | 10% of direct cost |
Your own figures will differ. Use your payroll, your van costs and your timesheets, not ours.
Worked example: the three-storey office
This is the visit plan from PPM schedule for commercial plumbing and heating: 12 visits a year. Monthly water temperature checks, extra tasks every quarter, an expansion vessel flush every six months, and a big annual visit in June. All figures below are examples.
| Visits | How many | Hours on site each | Hours on site | Travel hours |
|---|---|---|---|---|
| Monthly only (January, February, April, May, July, August, October, November) | 8 | 1.0 | 8.0 | 8.0 |
| Quarterly (March, September) | 2 | 3.0 | 6.0 | 2.0 |
| Quarterly and six-monthly (December) | 1 | 3.5 | 3.5 | 1.0 |
| Annual (June), two engineers for 4.5 hours each | 1 | 9.0 | 9.0 | 2.0 |
| Total | 12 | 26.5 | 13.0 |
| Labour: 39.5 hours × £30.00 | £1,185.00 |
|---|---|
| Mileage: 13 round trips × 30 miles × £0.20 | £78.00 |
| Consumables and small parts included | £180.00 |
| Office time: 3 hours planning and reports × £22.00 | £66.00 |
| Direct cost | £1,509.00 |
| Overheads at 10% of direct cost | £150.90 |
| Full cost | £1,659.90 |
| Price for a 25% margin: £1,659.90 ÷ (1 − 0.25) | £2,213.20 |
| Price quoted, rounded | £2,220.00 a year |
| Margin at the quoted price: £560.10 ÷ £2,220.00 | 25.2% |
Margin, not markup
Margin is profit as a share of the price. Markup is profit as a share of the cost. Adding 25% to the £1,659.90 cost gives £2,074.88, and the margin on that price is 20%, not 25%. To hit a margin, divide the cost by one minus the margin.
| Markup on cost | Margin on price |
|---|---|
| 20% | 16.7% |
| 25% | 20.0% |
| 33.3% | 25.0% |
| 50% | 33.3% |
Test the price before you send it
A PPM price is a bet on hours. Run the same sum with the visits going wrong:
| What changes | Extra cost (with 10% overheads) | Margin at £2,220 |
|---|---|---|
| Nothing: the plan as priced | £0.00 | 25.2% |
| Each of the 12 visits adds 30 minutes of engineer time on site (locked rooms, waiting for keys) | £198.00 | 16.3% |
| Every trip takes 30 minutes longer in traffic | £214.50 | 15.6% |
Half an hour per visit takes away over a third of the profit. Check access arrangements, parking and plant room keys on the survey, and write them into the contract.
What to put in the contract
- The schedule itself: assets, tasks and frequencies, so both sides know what the price covers. The PPM schedule template is a starting point.
- What is included: labour, travel, and consumables up to a stated value.
- What is not: call-outs, remedial work found on visits, and parts above the stated value. Quote those separately.
- Access: who provides keys and escorts, and what happens when the engineer cannot get in.
- Billing: yearly, quarterly or monthly. The example comes to £555.00 a quarter or £185.00 a month, before VAT.
- Price review: when and how the price changes at renewal.
VAT and CIS on PPM work
HMRC lists the repair, servicing and maintenance of heating, ventilation, drainage, sanitation and water supply systems as outside CIS (CIS 340, Appendix C). So a contract that is only servicing has no CIS deduction and no VAT reverse charge, and VAT is charged normally. At the standard rate of 20%, the example comes to £2,664.00 a year, or £222.00 a month. If the same contract also includes any building work, such as making good after a repair, every payment under it comes into CIS (CIS 340, 2.21) and the reverse charge may apply. See reverse charge VAT for maintenance work and CIS for building services contractors.
Who does what
- Whoever prices the work surveys the site, lists the assets, builds the hours from the schedule and sets the inclusions.
- Engineers record real travel and on-site times, so the next price is based on facts.
- The client confirms the asset list, the access arrangements and any risk assessment frequencies that change the visit plan.
- Your accountant checks the hourly cost and the overhead share once a year.
What to record
- The hours you priced for each visit type, and the hourly cost you used
- The actual travel and on-site time for every visit
- Consumables and parts used against the included value
- Visits lost to no access, and remedial work found and quoted
- The margin at the end of each year, before you agree the renewal price
Costing contract work in Field Suite
- Contracts with billing: billing set to monthly, quarterly or yearly with a price per invoice. Field Suite prepares the period's invoices as drafts for you to check and send.
- Costs on each job: travel time from "on my way" to arrival and time on site up to the customer's signature, valued at each engineer's own hourly cost, plus parts at cost. Compare them with the hours you priced.
- Price book: items with cost, price and margin, shown in red under 20%.
- Route order: "Best order" in the day view of the diary puts an engineer's booked visits in a shorter order and shows the estimated miles before and after.
See planned maintenance software, pump maintenance software and subcontractor management, read what a job sheet should show, check prices, or book a demo.
Field Suite is job management software. The figures on this page are examples to show the method; your own costs set your price.
Questions
Should travel be charged separately?
On a fixed-price contract you can build travel into the price, as in the example, or list it as its own line. Either way, cost it: in the example it is a third of the labour hours.
What margin should a PPM contract make?
There is no official figure. Set a target that covers the risk of overruns, then test it with the visits running long, as above.
Is monthly billing worse than yearly?
Monthly billing smooths cash flow for both sides, but you carry the cost of the big annual visit until the payments catch up. In the example, June's visit is over a quarter of the year's hours.
Sources
- HMRC, Construction Industry Scheme: a guide for contractors and subcontractors (CIS 340), updated 27 August 2026, para 2.21 and Appendix C. https://www.gov.uk/government/publications/construction-industry-scheme-cis-340/construction-industry-scheme-a-guide-for-contractors-and-subcontractors-cis-340
- GOV.UK, VAT rates (standard rate 20%). https://www.gov.uk/vat-rates
- GOV.UK, Check when you must use the VAT domestic reverse charge for building and construction services. https://www.gov.uk/guidance/vat-domestic-reverse-charge-for-building-and-construction-services
All other figures on this page are worked examples, not market data. Last checked: 5 November 2026 against the sources above.
Field Suite is job management software for UK building services firms, not a consultancy. Your own risk assessments, contracts and advisers decide what applies to your work. Spotted a mistake? Email info@fieldsuiteapp.com and we correct it.