Quote vs estimate in Australia: what's the difference?

"Is that a quote or an estimate?" is a question worth answering before the customer asks it. The two words get used as if they mean the same thing, but they don't, and the difference matters when the final bill lands.

The short version

• A quote is a fixed price for a clearly defined job. If the customer accepts it, that's the price for that work.
• An estimate is your best guess at what the job will cost. The final price can move.

The NT Government's consumer page puts it simply: a quote is a firm offer to do a job for a set price, and once accepted it becomes an agreement; an estimate is an educated guess (NT Government: quotes and estimates). Consumer agencies in other states describe it the same way.

Why the difference matters

When a customer accepts a quote, they're agreeing to a price for a scope. If you then charge more for the same scope, you're asking them to pay more than they agreed to. That is where most disputes start.

When a customer accepts an estimate, they're agreeing to a method (for example "hourly rate plus materials, about $800"). If the job runs to $950 because the blockage was further down the line, that's within the deal, as long as you were clear about it up front.

Under the Australian Consumer Law you also can't mislead customers about price. Calling a rough guess a "fixed quote", or leaving out costs you know will come, is asking for trouble.

When to quote

Quote when you can see and measure the whole job:

• A fence run you've walked and measured
• A switchboard upgrade where you've seen the board
• A deck where you know the size, material and height
• A bathroom where you've done a proper site visit

Most customers prefer a fixed price. It's easier to say yes to, and easier to compare.

When to estimate

Estimate when the job is genuinely unknown until you start:

• Fault-finding on an electrical or plumbing problem
• Leak detection
• Work behind walls or under floors in an old house
• Repairs where the cause isn't clear yet

Even then, you can often quote the first part: "Call-out and first hour, $220, then $110 an hour. I'll call you before I go past two hours."

A third option: quote with allowances

Bigger jobs often mix the two. You quote a fixed price for what you know, and put clear allowances on the parts you don't.

• Provisional sums cover work you can't price yet, like rock excavation or structural repairs found on demolition.
• Prime cost (PC) items cover things the customer hasn't picked yet, like tapware or tiles, at an allowance per item.

In residential building contracts, several states set rules for how provisional sums and PC items must be described, so check your state's building contract requirements before you rely on them.

How to word each one

A quote:

Supply and install 6 LED downlights, 4 double power points and 1 ceiling fan with light. Price: $2,365 including GST. Valid until 21 November. Any change to this scope will be quoted and agreed before the work is done.

An estimate:

Find and repair the leak under the kitchen. Estimate: $450 to $700 including GST, charged at $120 an hour plus parts. I'll call you before going over $700.

Handling variations

Even the best quote meets surprises. The rule is simple: stop, price it, get a yes, then do it.

1. Explain what you found and why it's outside the quote.
2. Give a price for the extra work.
3. Get agreement in writing (a text or email is far better than nothing).
4. Then do the work.

Customers rarely argue about a variation they agreed to before it happened. They often argue about one they first see on the invoice.

Common mix-ups to avoid

Calling a guess a quote. If you write "Quote: $1,500" for a job you haven't seen properly, the customer will hold you to $1,500. If you're not sure, call it an estimate and say how the final price is worked out.

Calling a fixed price an estimate to keep options open. It might feel safer, but customers trust it less and compare it badly against fixed quotes from other tradies. If you can measure the job, quote it.

A quote with no scope. "Bathroom: $25,000" leaves you nowhere to stand when the customer expects a heated towel rail you never priced. Write down what's in and what's out.

Leaving out costs you know about. Skip bins, tip fees, travel and certificates belong in the price. Adding them later looks like a hidden fee.

No expiry date. Material prices move. Put a valid-until date on every quote so a six-month-old price doesn't come back to bite you.

What customers want to know

Most customers ask the same three things: "Is that the final price?", "What happens if you find something?" and "When do I pay?" A good quote answers all three before they ask. Say whether the price is fixed, how variations work, and what the deposit and payment stages are. See deposits for tradies for the rules on how much you can ask for up front.

Which should you use?

If you can measure it, quote it. If you can't, estimate it and explain how the final price will be worked out. Most tradies win more work with quotes, because a fixed price is easier to say yes to. For a step-by-step layout, see how to write a quote.

When you send a quote from Karven, the customer sees a clear total, ticks any optional extras, and accepts online, so there's a record of exactly what was agreed.

This guide is general information, not legal advice. Check with your state's fair trading office or building regulator for the rules that apply to your work.