Price a maintenance contract by working out what the planned visits really cost you, adding a margin and a risk allowance, and then deciding how reactive work is charged. Most UK service firms do this best with a hybrid: a fixed periodic fee for planned, compliance-driven visits, plus a published schedule of rates for repairs. The model matters less than the data behind it. If you can't say how many assets you are covering, how often each one needs attention and how long it takes, you are guessing.
This guide is for contractors in engineering, facilities, HVAC, electrical, catering equipment and similar compliance-led trades. It covers the main pricing models, a worked example, the clauses that protect your margin, and how to keep pricing honest once the contract is live.
TL;DR
- The four common models are time and materials, fixed price, unit pricing (per visit or per asset) and hybrid. For most growing service businesses, hybrid is the safest.
- A contract is only as defensible as the asset register under it. Price from the register, not from a site walk and a hunch.
- Cost the planned work bottom-up (hours, travel, parts, certificates, admin), then add margin and a contingency for the unknowns.
- Cap or pre-authorise reactive spend, and define what counts as in scope before you sign.
- Review profitability per contract each year. Underpriced contracts hide inside busy diaries.
Table of Contents
- The four pricing models in plain terms
- Start with the asset register, not the quote
- How to calculate the cost of planned maintenance
- Pricing reactive work without losing control
- Fixed fee, per unit or hybrid: choosing for your business
- Clauses that protect your margin
- Records are part of the product
- What we have seen: pricing is a data problem
- Pricing with Curcle
- Review contract profitability every year
- FAQ
- Sources
The four pricing models in plain terms
UK contract documents tend to describe the same handful of structures. NEC's Term Service Contract guidance is a useful reference point because it is widely used for facilities and maintenance services, and it shows how routine planned work and reactive work are often priced separately.
| Model | How it works | Who carries the risk | Best for |
|---|---|---|---|
| Time and materials | Labour at agreed hourly or day rates, parts at cost plus a mark-up | Client carries volume risk, you carry little | Reactive work, unknown condition, one-off projects |
| Fixed price (lump sum) | A set fee for a defined scope over a year or other period | You carry the risk of overruns | Stable, well-documented assets with predictable PPM |
| Unit pricing | A price per visit, per asset or per task | Shared: volume moves the bill, unit cost is yours | Multi-site estates, repeat inspections, certificate-driven work |
| Hybrid | Fixed fee for planned work, schedule of rates for reactive | Split by type of work | Most compliance-led service businesses |
Time and materials
Simple to run and easy to defend, because the client pays for what happened. The weakness is that it gives the client no budget certainty, and many buyers dislike that. It also rewards slow work, which is awkward when you are competing on a tender.
Fixed price
A fixed annual or periodic fee gives the client a number they can budget. It gives you predictable cash flow too, but only if your scope is tight. A fixed price over a vague asset list is how margins disappear: every missing boiler, extra extractor or newly discovered fire door becomes your cost.
Unit pricing
Per-visit or per-asset rates sit between the two. A price per fire extinguisher, per PAT item, per air handling unit or per quarterly water temperature round scales cleanly when the estate changes. It works particularly well when your register is accurate, because the invoice can be traced line by line to a record.
Hybrid
This is the model we see working best for growing firms. The fixed element covers planned, routine compliance work. Reactive repairs run on a transparent schedule of rates. The approach is visible in public sector specifications: one NHS hard FM specification covers planned preventative maintenance, reactive repairs and minor works as distinct elements of the service. Splitting them protects your margin on predictable visits and gives the client clear, auditable costs for the variable part.
Start with the asset register, not the quote
The single biggest pricing mistake is quoting before you know what you are maintaining. Every number in a maintenance price depends on three facts per asset: what it is, what test or service frequency applies, and how long the work takes.
The HSE's guidance on electrical switchgear, HSG230, makes the point that the frequency and type of maintenance can be determined from an assessment, and that programmes may be time-based, condition-based or reliability-based. Frequencies are therefore not something to invent at quote stage. They come from a risk assessment, the manufacturer's instructions and the statutory requirement for the equipment.
In practice, before you price:
- Walk the site and list every asset in scope, with location and identifier.
- Record the make, model, age and condition. Old or poorly maintained kit costs more to look after.
- Attach the required service or test frequency to each asset and note where that comes from (statute, manufacturer, client policy).
- Flag access constraints: out-of-hours working, permits, escorted access, roof or confined space work.
- Photograph anything that is already faulty, so pre-existing defects are not later blamed on you.
That last step is a pricing protection as much as a compliance one. If you later need to explain why a repair is chargeable and not part of the fixed fee, dated photographs and a baseline register settle the conversation. We cover the register side in more detail in our guide to asset register management.
How to calculate the cost of planned maintenance
This answers the question most buyers and contractors type: how is the annual cost calculated? Build it bottom-up for each asset group, then add up.
The cost stack
- Labour: time on site per visit, multiplied by visits per year, multiplied by your fully loaded hourly cost (wages, employer's National Insurance, pension, training, holiday, not just the pay rate).
- Travel and vehicle: drive time between sites is paid time. Add fuel, vehicle running costs and any congestion or parking charges.
- Consumables and standard parts: filters, belts, seals, test labels, PPE, cleaning materials.
- Certification and reporting time: writing up the certificate or report is work. Include the time to complete, check and issue it.
- Calibration and tooling: test equipment needs calibrating and replacing.
- Overhead: office time, insurance, software, accreditation fees, scheduling and invoicing.
- Margin: what you need to make after everything above.
- Risk allowance: a percentage for the unknowns in the scope.
A worked example (illustrative figures)
The numbers below are invented to show the method. Replace them with your own costs.
Say you are pricing quarterly planned maintenance on 12 packaged air conditioning units across a small office block.
| Line | Calculation | Annual cost |
|---|---|---|
| Labour | 12 units × 4 visits × 0.75 hours × £38 loaded hourly cost | £1,368 |
| Travel | 4 visits × £30 vehicle and drive time | £120 |
| Consumables | 12 units × £18 filters and sundries per year | £216 |
| Reporting and admin | 4 visits × 0.5 hours × £30 | £60 |
| Direct cost | £1,764 | |
| Risk allowance | 8% of direct cost | £141 |
| Overhead | 12% of direct cost | £212 |
| Subtotal | £2,117 | |
| Margin | 20% on price (divide by 0.80) | £2,646 |
The margin step trips people up. A 20% margin on price means dividing cost by 0.80, not multiplying by 1.20. Multiplying gives you only a 16.7% margin on what you actually invoice.
As a unit price, that works out at about £220.50 per unit per year. Now you have a number you can defend, and one you can compare across contracts.
Pricing reactive work without losing control
Planned work is predictable. Reactive work is where contracts leak money, so decide the rules up front.
Schedule of rates
Publish an hourly or day rate, a call-out charge and a mark-up on parts. Separate normal-hours and out-of-hours rates, and say what response times each applies to. Public sector frameworks use the same idea; for example, Crown Commercial Service call-off documents include a billable works schedule that sets out how works outside the core service are priced and authorised.
Pre-authorised limits
Many service contracts set a value below which the contractor can proceed without asking, with anything above needing written approval or a quote. A limit such as £1,000 is a common figure in public sector specifications, but the right level for you depends on the client and the trade. What matters is that the number is written down, and that your engineers and office team both know it.
Define in scope and out of scope
The scope should say, in plain words:
- which assets are covered, by reference to the register;
- which tests and services are included, and at what frequency;
- whether parts are included, capped or chargeable;
- what happens with assets added or removed mid-term;
- what counts as a fair-wear repair versus damage or misuse;
- the response and fix times, and the remedy if you miss them.
Fixed fee, per unit or hybrid: choosing for your business
Use these questions to choose.
How well do you know the assets? If the register is detailed and recent, fixed or unit pricing is safe. If you are inheriting kit with no history, start with unit pricing for the first year and a schedule of rates for repairs, then move to a fixed fee once you have data.
How regulated is the work? Statutory inspection work (gas safety, electrical testing, lifting equipment, F-gas checks, water hygiene) has fixed frequencies, which suits a fixed or per-unit fee. Reactive repairs do not, which is why hybrid fits so often.
How large is the client? Larger buyers and public bodies often want a price list against an asset register plus a schedule of rates, so be ready to supply both.
What does your cash flow need? Monthly or quarterly fixed fees smooth income. If you are growing, that predictability is valuable, because it lets you plan engineer hiring against recurring revenue.
Clauses that protect your margin
Pricing is half the job. The contract wording protects it.
- Indexation: link the fee to an agreed index or an annual review, so wage and parts inflation does not eat a multi-year deal.
- Asset changes: a mechanism to adjust the price when assets are added, decommissioned or found missing from the original list.
- Access: a clause making repeated failed visits chargeable.
- Pre-existing defects: a baseline survey, with defects noted and quoted separately.
- Service levels: realistic response and fix times, with the measurement method agreed. Promise four-hour response only where you can staff it.
- Payment terms and late payment: state them clearly, along with what happens to the service if invoices go unpaid.
- Termination and notice: protect yourself from a client leaving mid-year after you have front-loaded cost.
Our guide to maintenance contract management goes deeper on keeping these terms visible after signing.
Records are part of the product
Clients are not just buying visits. They are buying evidence. Under UK health and safety law, such as PUWER, employers must keep work equipment in a safe condition, and records of inspections, tests and repairs are how they demonstrate it. The HSE's guidance on keeping electrical switchgear safe is a good example of the kind of maintenance and inspection recording expected for safety-critical equipment.
This shapes pricing in two ways. First, the time to complete certificates and reports is a real cost and belongs in your price. Second, being able to produce clean, traceable records quickly is something clients pay for, and a reason to resist being the cheapest bid. If you cannot show who did what, when, and with what result, the client carries the regulatory risk and will eventually take it to someone who can.
Sector-specific record-keeping guides on our blog go into the detail: PAT testing frequency, F-gas record keeping, water hygiene reporting and Gas Safe certificate requirements.
What we have seen: pricing is a data problem
Curcle was born inside a real UK service and engineering business, and the pattern we saw there is the one we hear from owners now. Contracts are priced carefully at the start, then drift. A new asset is added without a price change. A client's reactive spend doubles and nobody notices. Engineers spend longer on site than the quote assumed, and the information sits in three places: a spreadsheet, an inbox and someone's head.
Our view is that a maintenance contract should be treated as a live commercial object, not a signed PDF. That means:
- the register, the contract scope and the job history live in one system, so the price can be tested against reality;
- planned visits are generated from the contract, so nothing included in the fee is forgotten and nothing outside it is given away;
- time, parts and certificate work are captured on every job, so you can see profit per contract rather than guess;
- software should flag what needs attention, such as a contract running at a loss or visits slipping towards a breach, rather than only recording what already happened.
We would also say this about AI and pricing: it can help surface patterns, but a person who understands the client and the site should set the price. Evidence supports the decision. It does not replace it.
— Luke Herridge
Pricing with Curcle
If your contract pricing lives in spreadsheets, Curcle brings jobs, assets, compliance, stock, quoting and invoicing into one connected system, so you can see whether each contract earns what you priced it to earn. Plans are published: Starter is from £99 per month, Professional from £249 per month and Business from £499 per month, with Enterprise on request. See the pricing page for what each includes, or look at our facilities management software if you run multi-site SLA work.
Review contract profitability every year
A yearly review is where pricing improves. For each contract, compare:
- Planned hours quoted against hours actually booked.
- Reactive spend against the schedule of rates and any caps.
- Visits delivered on time against the SLA.
- Assets on the register now versus at signing.
- Margin achieved against margin priced.
Where the gap is large, you have three options: reprice at renewal, change scope, or change how you deliver, for example by improving PPM scheduling to cut travel. Walking into a renewal conversation with this data is far stronger than asking for an increase because costs have gone up.
FAQ
What should be included in a maintenance contract?
A clear scope tied to an asset register, the tests and services included and their frequencies, response and fix times, rules for parts and reactive work, pricing and indexation, access terms, reporting and records, and termination and notice terms. Without a list of covered assets, scope disputes are almost certain.
How is the annual cost of a maintenance contract calculated?
Add labour (fully loaded), travel, consumables, reporting time and overhead for every planned visit across the year, then a risk allowance and your margin. Divide by the number of assets if you want a unit price. The worked example above shows the steps.
Is a fixed price or a schedule of rates better?
Neither is better for everything. A fixed price suits predictable planned work on a well-documented estate, and a schedule of rates suits reactive repairs. Many UK contractors combine the two in a hybrid contract.
How do I stop a fixed-price contract losing money?
Price from a verified asset register, record pre-existing defects at the start, set a mechanism to adjust the fee when assets change, and review hours and costs per contract each year. Cap or pre-authorise reactive spend so one bad month does not wipe out the margin.
Sources
- NEC: TSC, when a task is not a task
- HSE: Keeping electrical switchgear safe (HSG230)
- Kent and Medway NHS: Hard FM specification
- Crown Commercial Service: Call-Off Schedule 4a, Billable Works