Quick answer: A quote is a fixed price you're committing to for a clearly defined job. An estimate is your best guess of the likely cost when the job has unknowns and the final figure may change. Use a quote when the scope is clear, an estimate when it isn't — and always label which one it is.
"Quote" and "estimate" get used interchangeably on building sites, but they mean different things — and the difference matters when a customer expects to pay the figure you gave them. Here's how to tell them apart and use each one to protect yourself.
What is a quote?
A quote is a fixed price for a clearly defined piece of work. You're saying: "This is the job, and this is what it will cost." Once the customer accepts it, you're generally committing to deliver that scope for that price, so only quote when you can see the whole job and you're confident in the numbers. A clear, itemised quote is what wins predictable jobs like a hot water swap, a deck or a repaint.
What is an estimate?
An estimate is your best, honest guess at the cost when the job has unknowns — hidden pipework, old wiring, the true state of a roof. It signals that the final price may move once you can see what you're dealing with. Estimates are fine, but you must label them clearly as an estimate and explain what could change the figure, or the customer will treat your guess as a promise.
Is a quote legally binding?
Broadly, once a customer accepts a genuine quote, it forms the basis of an agreement to do that work for that price — so you can't simply bump it up later unless the customer changes the scope. An estimate carries less weight because you've flagged that it's approximate. This isn't legal advice, but the practical lesson is the same: be deliberate about which one you're giving, and put it in writing.
How to protect yourself either way
- Label it clearly — write "Quote" or "Estimate" at the top so there's no confusion.
- Define the scope — the tighter the scope, the safer a fixed quote is.
- State your assumptions — e.g. "assumes existing wiring is to standard".
- List exclusions — say what's not included so extras are clearly extras.
- Add a validity period — e.g. valid for 30 days, so old prices don't haunt you.
Show the price clearly — and the GST
Whether it's a quote or an estimate, make the total unambiguous and show GST if you're registered. Our guide to GST on quotes explains how.
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Frequently asked questions
What's the difference between a quote and an estimate?
Is a quote legally binding?
When should you give an estimate instead of a quote?
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