Quote estimator: what is this job actually worth?
Most quotes are built backwards from a number somebody feels comfortable sending. This one starts from the hours, the internal cost of those hours, and the materials — then shows you two things a quote sheet never does: how many unpaid hours your margin is really buying, and the price you need before your own time is worth what you say it is worth.
Build the quote, then interrogate it
Enter the number of line items, the average hours each one takes, what an hour of your own time costs you, a materials allowance, a target margin, and the GST slab that applies. Add the internal hourly rate the work needs to be worth and the tool tells you which of the two constraints — margin or rate — actually sets the price. In most cases they are different numbers, and only one of them was ever checked.
Both percentage and rate targets are assumptions you set, not figures we have measured for your industry. The margin is the share of the price you keep; the internal rate is the amount you want the work to be worth per hour once the money has actually arrived.
- Total effort
- 48 hrs
- Labour cost
- ₹40,800
- Cost base
- ₹65,800
- Price at target margin (excl. GST)
- ₹94,000
- Gross profit
- ₹28,200
- GST at your slab
- ₹16,920
- Quote total (incl. GST)
- ₹1,10,920
- Effective markup on cost
- 42.86%
- Implied hourly rate (excl. GST)
- ₹1,958.33
- Implied rate incl. GST (misleading)
- ₹2,310.83
- Unpaid hours as share of effort
- 69.12%
Which constraint sets your price
| Constraint | Excl. GST | Incl. GST | Binds? |
|---|---|---|---|
| Clear the 30% margin | ₹94,000 | ₹1,10,920 | No — rate needs more |
| Earn ₹2,500 per hour | ₹1,20,000 | ₹1,41,600 | Yes — this sets the price |
| Price to use | ₹1,20,000 | ₹1,41,600 | Rate binds |
- Price needed to hit your internal rate
- ₹1,41,600
- Uplift over the margin price
- ₹26,000
- Margin at that price
- 45.17%
- Unpaid hours at that price
- 63.76 hrs
Warning: at ₹94,000 the work earns ₹1,958.33 an hour, which is ₹541.67 below the ₹2,500 you said you need. This is the ordinary way a quote loses money — not because anyone over-charged, but because the margin target and the rate target were never the same number and only one of them got checked. To earn your rate, this quote has to be ₹1,41,600 including GST, a ₹26,000 increase.
What this cannot do: it does not know whether the hours per item are realistic, whether the client will accept the number, or whether the work fits a change order. Margin is a target you set, GST is pass-through rather than income, and the margin converted into hours is not overtime pay — it is the buffer that lets a fixed price survive contact with a real project.
How this is calculated
Total effort = Line items × Average hours per item
Cost base = (Total effort × Internal hourly cost) + Materials allowance
Price at target margin = Cost base ÷ (1 − Target margin ÷ 100)
GST = Price × GST slab ÷ 100 · Quote total = Price + GST
Effective markup on cost = Gross profit ÷ Cost base × 100
Implied hourly rate = Price (excl. GST) ÷ Total effort
Unpaid hours bought by margin = Gross profit ÷ Internal hourly cost
Price to hit target rate = Target internal rate × Total effort
Required price = MAX(Price at target margin, Price to hit target rate)Margin is taken on the price, not added to the cost, so the price is the cost divided by the remainder rather than multiplied by one plus the margin. The two errors this tool exists to prevent are specific. The first is dividing the invoice total by hours and calling the result an hourly rate — that figure contains GST, which was collected on behalf of the government and was never yours to earn. The second is setting a margin target, stopping there, and never checking what the resulting rate is per hour. The required-price figure takes the higher of the two constraints, because a quote that clears only one of them still fails.
Worked example: the quote that looked fine and was not
Eight line items at six hours each is 48 hours of effort. At an internal cost of ₹850 an hour that is ₹40,800 of labour, and with a ₹25,000 materials allowance the cost base is ₹65,800. Targeting a 30% margin, the price is ₹65,800 ÷ 0.70 = ₹94,000, giving ₹28,200 of gross profit. GST at 18% is ₹16,920, so the client is invoiced ₹1,10,920. The effective markup on cost is 42.86% — the number a 30% margin always corresponds to, and the reason margin and markup arguments go nowhere.
Now the two questions the quote sheet skipped. First, that ₹28,200 of margin is ₹28,200 ÷ ₹850 = 33.18 hours of unpaid work — 69% of the total effort. That is what the margin is genuinely for: not profit in the abstract, but the buffer that lets a fixed price absorb the revision round nobody quoted for. Second, divide the price by the hours and the job earns ₹94,000 ÷ 48 = ₹1,958.33 an hour before tax. Divide the invoice total instead and it looks like ₹2,310.83, which is a comfortable fiction built entirely out of GST.
If the real target is ₹2,500 an hour, the ₹94,000 quote is short by ₹541.67 every hour it takes. The rate constraint demands ₹2,500 × 48 = ₹1,20,000 before tax, which is ₹26,000 more than the margin price, ₹1,41,600 with GST, a 45.17% margin, and 63.76 unpaid hours. Nothing about the work changed between those two quotes. Only the target did — and the second one is the quote that survives contact with the project.
Why the number on the quote sheet drifts from reality
A quote is a promise made under uncertainty, and the uncertainty is almost never written down. The hours per item are a guess that gets firmer with every project until a client asks for something slightly different and the guess is quietly wrong. The materials allowance is whichever supplier quote happened to arrive first. The internal hourly cost is whatever makes the margin look respectable. None of these are lies, but together they produce a price that is defensible on the page and indefensible at month end.
The fix is not a cleverer multiplier. It is pricing from the same records that delivery and billing will later read — hours attached to the work, costs attached to the project, and a quote whose line items the invoice can inherit. In NoxOrigin a quote carries line items, tax treatment, terms, and a send state, and an accepted quote becomes an invoice without the client being re-typed. That continuity is the practical difference between a price you intended and a price you can evidence. You can see how quotes and GST invoices connect in Quotes, Billing & Finance, or start from a structure in the quotation template and the quotation and invoice workflow.
Related tools
- Agency Utilisation Calculator — check whether the team has the hours to deliver what you just quoted.
- CRM Migration CSV Builder — check the customer rows behind the pipeline before they go anywhere.
- Markup vs Margin Calculator — the conversion between the two pricing languages.
- Project Profitability Calculator — what the job returned once the hours actually happened.
- Profit Margin Calculator — the same arithmetic across a whole period.
- Receivables Aging Calculator — margin is only banked once the invoice is collected.
- All free tools for small business operations.
Want quotes that read from the work?
In NoxOrigin, a won opportunity carries its commercial scope into delivery, and the quote, the invoice, and the payment stay attached to the same client record. Unbilled work stops being invisible because delivery and billing read the same records, so the gap between what you quoted and what you can invoice shows up while the project is still running rather than in a month-end reconstruction. Quotes and invoices are raised as explicit permissions, so delivery staff can work the queue without being able to create money documents.
This remains a planning view of your own inputs. It is not cost accounting, and how much of your cost base is genuinely recorded decides how meaningful any of it is.