How to Price Cleaning Contracts: Complete Guide for Contractors

How to price cleaning contracts: the commercial case first

Most UK and Irish cleaning companies do not lose money because they charge too little per hour. They lose money because they agreed a scope they never costed. A two-hour quote for a site that needs two and a half hours is not a pricing problem, it is a measurement problem that shows up in the margin three months later, once the crew is running behind and the client is already used to the standard you set on day one.

Price per hour is a number. Price per site, per visit and per square metre is what actually lands in the bank. This guide sets out the costing model, the productivity ratios, overheads, break-even, contract clauses and the escalation rules that let you raise prices without losing accounts. It is written for commercial cleaning contractors, facilities management firms and in-house hygiene teams in Spain, the UK and Ireland, and it is deliberately opinionated where the industry usually equivocates.

Start with the units you actually sell

Before any rate card, fix the unit of sale. Confusing the unit is the single most common cause of underpriced contracts.

• Square metre rate: suited to repeatable, open floor plates, such as offices, warehouses, education and retail. Requires a realistic productivity ratio, not a brochure figure.
• Hourly rate: suited to reactive and specialist work, one-off deep cleans, technical cleaning and anything with an unpredictable scope.
• Price per visit: the cleanest unit for regular contracts. The client buys a defined deliverable at a defined frequency, and you carry the productivity risk you priced for.
• Price per unit of output: hotels per room, hospitals per bed, restaurants per cover, washrooms per fixture. This is where professional buyers think, and where you should quote.
• Monthly retainer with a defined scope: for clients who want a flat, predictable invoice and are willing to accept a clear boundary of what is and is not included.

Pick the unit the buyer already uses in their own budget. If the client thinks in rooms per day, quoting square metres invites a comparison you did not choose.

Know your real cost per productive hour

The wage is not the cost. The cost is the fully loaded hourly rate, and for a Spanish cleaning company the gap between the two is wider than most owners admit.

• Gross salary plus employer contributions: in Spain, employer social security adds roughly 30 to 33 percent on top of gross pay. Budget the top of that range, not the bottom.
• Paid hours that produce no billing: holidays, public holidays, sick leave and statutory leave. For Spanish full-time contracts this is typically 30 to 35 days a year, and it is not optional.
• Travelling and waiting time: travel between sites, travel inside shift, waiting for access and, in Spain, the time spent travelling to the first client of the day when the contract requires it. This is where a two-hour job becomes three paid hours.
• Non-productive on-site time: setting up and packing down equipment, changing chemicals, filling and emptying machines, moving furniture to reach floors, and lock-up time.
• Uniforms and personal protective equipment: replaced on rotation, not once.
• Consumables provision: if you supply the chemicals, cloths, bin liners and paper, that is a real cost line per site; if the client supplies them, negotiate it out of the rate explicitly.
• Training, team meetings and supervision: a supervisor visiting four sites costs four visits, and that time has to appear in the rate somewhere.
• Insurance, licences and compliance: public liability, occupational accident cover and the risk assessment, chemical handling and safety training the law demands.

Divide the fully loaded annual cost by the number of hours your contracts can realistically be billed for. That is your floor. Any quote below it is a subsidy.

Overheads: the three numbers that decide whether the month closes

Overheads are not a percentage you guess at the end of the year. They are three figures you should know on the first of every month.

• Office, warehouse and storage overhead: rent or mortgage, utilities, connectivity, insurance on the premises, and the space taken up by equipment and stock.
• Vehicle running costs: lease or depreciation, fuel, insurance, servicing, tyres and the downtime when a van is off the road.
• Commercial and administrative overhead: supervision, customer service, billing, software, advertising, tender production and the sales time that never gets billed to anyone.

Convert overheads into an hourly recovery figure: annual overhead divided by annual billed hours. If your overhead is 60,000 euro and you bill 50,000 hours, every billed hour must recover 1.20 euro before it contributes a cent of profit. Load that into the rate card rather than discovering it in the annual accounts.

Productivity: the ratio, not the assumption

Productivity is the number of square metres one operative cleans in one hour. It is the difference between a strong margin and unpaid work, and it is the figure contractors get wrong most often, usually by quoting the optimistic end of the range.

• Typical office, routine maintenance: 250 to 400 square metres per hour on open, carpeted or vinyl floor plates with clear access.
• Dense office with workstations, cable trays and cluttered desks: 120 to 200 square metres per hour, and the client must be told that the clutter is the reason.
• Washrooms: two to three minutes per fixture. Sanitary areas have no economies of scale: five washrooms never cost the same as one large hall.
• Communal areas and stairs: 50 to 90 square metres per hour, depending on corners, balustrades, number of landings and surface type.
• Technical and high-level cleaning: quote by task and by access equipment, never by area.

Calibrate in two steps. First measure with a stopwatch on ten representative sites, and record productive time only. Then apply correction factors: layout (dense, open, cluttered), furniture density, machine-assisted versus manual cleaning, traffic and public access during cleaning hours, and level of finish expected. Review every quarter, because the same site gets slower as it gets more crowded.

Set your hourly rate from the bottom up

1. Cost per productive hour: fully loaded wage cost divided by the hours actually available for work in a year.
2. Break-even hourly rate: break-even day rate divided by productive hours. This is the number that pays the bills and no more.
3. Target rate: break-even multiplied by your target margin, adjusted for the client risk profile. Documented margin bands keep you from improvising under pressure.
4. Conversion into the client unit: hourly rate multiplied by the agreed productivity ratio gives the square metre or per-visit price.
5. Contract value check: visit price multiplied by visits per year gives the annual value, and the annual value is the first thing professional buyers test.

Work a concrete example. A building of 5,000 square metres is cleaned five nights a week. At a conservative 250 square metres per hour, that is 20 productive hours per night, 100 per week. If the break-even rate is 21 euro per hour, the cost of service is 2,100 euro per week and 109,200 euro a year. A 15 percent gross margin puts the price at 125,580 euro a year, or a square metre price of around 25 euro per square metre annually. Now compare that number to the client benchmark. If the incumbent is at half, the conversation is about scope and frequency, not about price.

Break-even: the number every owner should keep in view

Break-even is the point at which revenue covers fixed costs. Below it you are financing the client operations out of your own cash. Calculate it monthly, because it moves when wages, fuel or insurance move.

• Add fixed costs: wages for permanent staff, supervision, overheads, vehicles, insurance, software.
• Divide by the average contribution per billed hour, which is price minus variable cost per hour.
• The result is the minimum number of billed hours per month to survive. Billing above it creates profit; below it creates debt.
• Add ordinary variation: the same client requirements grow in winter and drop in August. The annual average is not the monthly reality.

The practical conclusion is not comfortable: you should know your break-even hour before you quote, not after you lose a contract and try to win it back on price. A contract won at break-even is not a win, it is a placement.

Contract clauses that protect the price

Rates get eroded by clauses, not by competitors. Seven terms decide whether a signed contract is still profitable in year three.

• Validated starting headcount: if the client staffing level drops, your material consumption, training cost and supervision change, and you want that reflected.
• Annual rise: review on the anniversary of the contract, not on the anniversary of the client financial year. Index it to the cost of labour and fuel plus a fixed percentage.
• Frequency: if the client asks for a second daily visit to washrooms, that is a new scope, quoted and signed.
• Frequency of works: if the client reduces cleaning days, the square metre rate rises because productivity falls. Fewer days means more accumulated dirt.
• Timing: cleaning outside the agreed hours, or during opening hours, changes productivity and must change price. Cleaning in a full office is not the same as cleaning an empty one.
• Waiting time and access: the client delays, locked doors, failed alarm codes and staff not ready to leave are billable. Put it in writing.
• Service level agreement and penalties: define what counts as a defect, the correction time, and the audit method. Vague SLAs are used against you.

How to raise prices without losing accounts

• Give 60 to 90 days notice in writing, and cite the trigger: statutory wage revision, fuel, insurance or the actual labour cost index.
• Come with the numbers. A client who sees the wage increase and the productivity data is far more likely to accept than one handed a percentage on its own.
• Offer alternatives instead of a flat no: same price with one route visit removed, or same scope with the increase spread over two steps.
• Segment. Domestic clients are highly sensitive to increases and easy to lose; offices, industrial, hotel and healthcare accounts tolerate a properly justified rise.
• Never mix a price rise with a service reduction. If quality drops at the same time, the client will remember the two together.
• Expect and plan for a 5 to 15 percent churn on a properly handled increase. If you lose none, the increase was too small.

Quick cost model you can replicate

Every number below must be replaced with your own, but the structure works for a commercial cleaning contract.

• Annual hours per worker: 1,826 theoretical hours, of which 1,760 after public holidays, and 1,692 after annual leave. Make it 1,550 to 1,600 productive hours once sick leave, travel and non-productive on-site time are stripped out.
• Fully loaded hourly cost: gross hourly wage plus employer contributions, plus the cost of non-productive paid hours spread across the productive ones.
• Productivity ratio by site type: 250 to 400 square metres per hour for open offices, 120 to 200 for dense ones, 2 to 3 minutes per washroom fixture.
• Client pricing rule: hourly rate multiplied by the number of productive hours required, plus a stated consumables and supervision line where applicable.
• Margin rule: minimum gross margin by client type. Domestic and small office accounts need a higher percentage than industrial or multi-site contracts, simply because the fixed cost of serving them is spread over less revenue.

Revisit the model every quarter and after every wage revision. A rate card built once and never updated is a slow-motion discount.

Adjacent revenue you are already paying for

Professional cleaning accounts buy consumables every month, and those consumables are the line where a contract quietly improves or erodes. Selling them as part of the service is usually better for both sides: the client stops managing three suppliers, and you control the material quality that determines how long a washroom takes to clean.

At LimpialoTodo.com we supply the consumables that cleaning companies bill on top of labour: general cleaners, disinfectants, paper and hand hygiene systems, cleaning tools and professional equipment. For a company running multiple sites, buying on consolidated pallets and stacking promotional pricing is often the difference between a 12 percent and an 18 percent gross margin on the same contract. Our professional paper and hand hygiene ranges and general cleaning chemicals are supplied in the quantities that contractors and facilities management buyers actually consume, and we back the same logistics on orders placed by phone or through the website, with the same delivery commitments and secure payment terms we apply to any professional account.

FAQs

What rate should I quote for a square metre cleaning contract?

Work from the fully loaded hourly cost, add overhead recovery, apply your target margin and then convert using a realistic productivity ratio. A common outcome for medium-density office space in Spain falls between 20 and 30 euro per square metre per year for daily cleaning. Anything materially below that range usually reflects an underestimated ratio, an unbudgeted travel time or consumables given away free.

Should I charge for consumables separately?

Either quote them as a separate line or state clearly that the client supplies them. What you must not do is leave the question open. Cleaning chemicals, cloths, bin liners, paper and hand hygiene products are a recurring real cost, and absorbing them silently into the hourly rate is one of the fastest ways to lose margin on a multi-year contract.

How much can I increase the price of a cleaning contract?

Typically the statutory labour cost increase plus the movement in your other inputs, and then a further adjustment if your productivity assumptions have proved wrong. Increases of 4 to 8 percent are accepted routinely in the sector when they are documented. Large one-off jumps are accepted far less often, so it is better to review prices annually than to correct the accumulated gap in a single letter.

Should I quote per hour or per square metre?

Quote in the unit the client already uses internally. Hospitals per bed, hotels per room, industrial per square metre, reactive work per hour. Where the client insists on an hourly rate, agree it alongside a fixed number of hours to deliver a defined scope, so the risk of an underestimated job does not sit entirely with you.

How do I compete with companies quoting far below my cost?

Usually you do not compete on price at all. In cleaning and hygiene, an unusually low rate normally means an underestimated ratio, untrained staff, no insurance compliance or consumables supplied free until the contract is renewed. Do not chase it. Show the buyer the productivity data, the labour cost breakdown and the service level agreement, and the comparison stops being about the hourly rate and starts being about the cost of getting it wrong.