The Painting Business Annual Rate Review: What to Check Every January Before You Price a Single Job
Most painting contractors start January the same way — with a full quote pipeline and last year's numbers. Materials went up 8%. Insurance renewed at 12% more. Wages crept 6%. But the rate sheet? Untouched. That's not a pricing strategy. That's a slow margin bleed hiding behind a busy schedule.
Why January Is the Right Time for a Rate Audit
Peak season is the worst time to discover your rates are wrong. You're quoting fast, jobs are stacking up, and there's no headspace to sit down with a spreadsheet. By the time you notice the numbers feel tight, you've already locked in six weeks of work at the wrong price.
January fixes that. Work is slower in most markets, your financials from the previous year are fresh, and you're not under quote pressure. A proper painting business annual rate review takes two to four hours if you do it properly — and it can recover thousands of dollars that you've been quietly leaving on the table.
Here's what to actually check.
Step 1: Pull Last Year's Real Costs
Start with what changed in your cost base. Don't guess — open the actual invoices and renewal notices.
- Paint and materials: Compare what you paid per litre (per gallon) in Q4 of the previous year versus twelve months earlier. If your main Sherwin-Williams, Dulux, or Resene account rep won't tell you the increase, your last few supplier invoices will. A 6–10% materials increase on a job where paint is 20% of your cost is a meaningful hit.
- Insurance: Liability, vehicle, and workers' comp or employer liability renewals all need to be included in your hourly cost. If your premium went up $2,400 annually and you bill 1,800 productive hours a year, that's $1.33/hr you're not recovering.
- Wages and on-costs: Did you give any pay increases last year? Did your super, pension, or payroll tax obligations change? In most markets, a 5–7% wage increase for a two-person crew adds $4,000–$8,000 to your annual labour cost.
- Vehicle and fuel: Running costs, registration, and servicing all compound. This one often slips through because it doesn't come as a single invoice.
Add it all up. The number you're looking for is your current fully-loaded labour cost per hour — wages plus every on-cost to employ that person. In most markets right now, that sits between $35–50/hr USD, $42–60/hr AUD, $32–46/hr NZD, $30–45/hr CAD, or £18–30/hr GBP. If you haven't recalculated yours in twelve months, you're likely under.
Step 2: Check Your Production Rate Assumptions
Your hourly cost is only half the equation. The other half is how many square metres (square feet) you're actually painting per hour — and whether your quote assumptions match reality.
Most contractors default to a single production rate for everything. That's where jobs go sideways. A standard repaint wall in good conditions should sit around 15 m²/hr (150 ft²/hr). Ceilings drop to 10 m²/hr (100 ft²/hr). Detailed work like doors or balustrades drops to 6.5 m²/hr (70 ft²/hr). If you've been quoting doors at wall rates, you've been undercharging on every door in the house.
Look at three or four jobs from last year where your margin came in below target. Pull the original quote hours versus what the job actually took. Chances are the variance is in:
- Prep time — using Standard (10%) when the job needed Heavy (25%) or Very Heavy (35%)
- Trim, detail, and cutting-in time — consistently underestimated
- Access and setup — jobs with scaffolding or elevated work platforms (EWPs/boom lifts) where that cost wasn't fully built in
The gap between Standard prep (10% of surface hours) and Heavy prep (25%) on a 60 m² (645 ft²) exterior wall at $50/hr AUD is roughly $90 in unrecovered labour cost — per surface. Multiply that across a full exterior repaint and you're talking serious margin erosion.
Step 3: Recalculate Your Minimum Sell Rate
Once you have your real costs, work out the minimum hourly rate you need to charge to hit your target margin. This is not your cost — it's your sell rate. They're different numbers, and confusing them is one of the most common mistakes in contractor pricing.
If your fully-loaded labour cost is $50/hr and you want a 35% gross margin, your sell rate needs to be around $77/hr. If materials, overheads, and access costs have all increased since you last set that number, the sell rate has to move with them — or the margin simply doesn't exist.
This is exactly the kind of check Surfacely's Profit-check tool is built for. You put in your actual costs — labour, materials, overheads — and it shows you whether the rate you're quoting actually delivers the margin you think it does. No assumptions. No spreadsheet guesswork. If the number's off, you see it before you send the quote, not after you finish the job.
Run your most common job types through this exercise: a standard 3-bedroom interior repaint, a full exterior on a two-storey house, a commercial repaint on a standard floor. If your sell rate hasn't moved in twelve months and your costs have, every one of those jobs is delivering less than you think.
Step 4: Decide What Goes Up and By How Much
Not every cost increase needs to be passed through dollar-for-dollar. Some you absorb through efficiency. Some you recover through better prep pricing. But the ones that are structural — wages, insurance, materials escalations — need to be reflected in your rates.
A 5–8% rate increase across your standard labour rate is reasonable in most markets right now and, in most cases, clients will accept it without pushback — especially if you've been delivering good work. The contractors who lose clients over price increases are usually the ones who've let rates drift for two or three years and then tried to catch up all at once.
Annual increases of 4–7% are far easier to sustain than triennial increases of 15–20%.
Set your new rates in writing. Update your quoting system, your templates, and your subcontractor agreements. Make it a clean changeover at the start of the year so there's no confusion about which jobs are on the old rate and which aren't.
Make It a System, Not a Scramble
A painting business annual rate review isn't a complicated exercise. It's two to four hours of focused work in January that protects every job you price for the next twelve months. The contractors who skip it aren't saving time — they're spending the whole year working harder for thinner margins and wondering why the numbers never quite add up.
Build it into your calendar now. Block the first or second week of January, pull your actual costs, check your production rate assumptions, and recalculate what you need to charge. Do it before you quote a single job in the new year.
If you want a faster way to run those numbers, Surfacely's Profit-check makes the cost-versus-sell-rate calculation straightforward — so you're not doing it in your head on a job site in March when it's already too late.