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Quote vs estimate in Australia comes down to one thing: a quote is a fixed price that becomes a legally binding contract once your customer accepts it, so you cannot charge more without an agreed variation. An estimate is an educated guess and is not binding, though the final cost should stay close to it.
Quote vs estimate in Australia comes down to one thing: a quote is a fixed price that becomes a legally binding contract once your customer accepts it, so you cannot charge more without an agreed variation. An estimate is an educated guess and is not binding, though the final cost should stay close to it.
The question usually arrives after the fact. You gave a customer a number, the job blew out, and now you are wondering whether they can hold you to it. Here is how it actually works, and how to word both documents so this never bites you again.
A quote is a fixed price that binds you once accepted, and an estimate is a considered guess that does not. business.gov.au puts the first half plainly: if a customer accepts your quote, it becomes a legally binding contract. WA Consumer Protection defines the second half: an estimate is an educated guess at the cost, and the final figure may land higher or lower.
Here is the catch that trips tradies up. The word at the top of the page does not decide which one you gave. If you put a single fixed number in front of a customer and they said "go ahead", you may have made a quote no matter what the document was called. The number scribbled on the back of a card in the driveway can bind you. That moment is what the rest of this article is for.
A quote becomes binding through ordinary contract mechanics: an offer, and an acceptance. You offer to do defined work for a fixed price. The customer accepts, in writing, verbally, or just by letting you start. From that point there is a contract at that number.
Once it exists, you generally cannot charge more than the quoted price. The exceptions are the ones you build in yourself: a variations clause that covers extra work and unforeseen conditions, or a fresh agreement with the customer before you do the additional work. Agree the change after the extra work is done and you are relying on goodwill, not the contract.
That is not a reason to avoid quoting fixed prices. Customers prefer them, and they win work. It is a reason to word the quote properly, which takes about three sentences and is covered below.
Calling a document an estimate is not a magic shield. State consumer bodies expect the final cost to stay in the neighbourhood of the figure you gave. WA Consumer Protection's wording is that the actual cost should not be too much more than the amount estimated, and the NT's fact sheet draws the same line.
So if you estimate $2,000 and bill $5,000 with no warning along the way, expect a fight, and possibly a complaint to Fair Trading. The ACCC's pricing rules sit behind all of this too: a business must not mislead on price, and a lowball "estimate" you never intended to hold near is exactly that.
An estimate buys you reasonable movement, not a blank cheque. The honest way to use one is to update the customer the moment the number starts moving, before the work is done rather than on the invoice.
Three changes keep an estimate reading as an estimate. Title the document "Estimate", not "Quote". Include one plain line: "This is an estimate only. The final price may vary once the full scope is known. We will confirm any change before doing the work." And where you genuinely do not know the scope, give a range instead of a single figure, because one hard number reads like a promise no matter what you call it.
That confirm-before-extra line is doing the heavy lifting. It sets the customer's expectation that the number can move, and it commits you to flagging changes early, which is what keeps disputes from starting.
Whatever tool you use, the document has to say what you mean. In Chippie you control the document title, the expiry date and a free-text terms field, so an estimate goes out reading as an estimate rather than as whatever the template defaults to. No tool decides the legal question for you. The wording does.
When you do want a fixed price, protect it with three additions. First, a variations clause: "Price assumes [the scope you listed]. Any extra work or unforeseen conditions will be quoted separately and agreed before we proceed." Second, an expiry date; business.gov.au and Business Queensland both recommend one, because material prices move and a quote from last winter should not bind you this summer. Third, show the GST component and your payment terms.
Those three lines turn a fixed quote from a trap into a fence. The price is certain for the work you described, and anything outside that description goes back through agreement before it costs you money.
Quote | Estimate | |
|---|---|---|
What it is | A fixed total price for defined work | An educated guess before full scope is known |
Legally binding? | Yes, once accepted as part of a contract | No, but the final cost should stay close to it |
Can you charge more later? | Only via an agreed variation | Yes, within reason and with explanation |
Best used when | Scope is clear and locked | Scope is uncertain or work is exploratory |
Word it with | Fixed price, expiry date, GST, variations clause | An "estimate only" line, a range where unsure, confirm-before-extra |
Before anything goes out the door, a quick check:
Document clearly titled Quote or Estimate
If a quote: fixed price, expiry date, GST shown, variations clause, payment terms
If an estimate: an "estimate only" line, a range where unsure, a confirm-before-extra promise
Customer acceptance captured somewhere, so you know when the clock started
Is a quote legally binding in Australia?
Yes, once the customer accepts it as part of a contract. business.gov.au states it directly: an accepted quote becomes a legally binding contract. Acceptance can be written, verbal, or the customer simply letting you start the work at the price you gave.
Can a tradie charge more than the quote?
Generally no. Once a fixed-price quote is accepted, you are held to it unless the quote included a variations clause or the customer agreed to the change before the extra work was done. Get variations agreed in writing before proceeding, not on the final invoice.
Is an estimate legally binding?
No. An estimate is an educated guess at the cost, and the final figure can be higher or lower. But state consumer bodies expect the final cost not to be too much more than the estimate, so it is not a licence to bill whatever the job took.
Does calling it an "estimate" protect me if I worded it like a fixed quote?
Not reliably. What binds you is the customer accepting a fixed price, not the heading on the page. A document titled "Estimate" that states one firm number for defined work can still be treated as an accepted quote in a dispute.
Do I have to show GST on a quote?
Show the GST component clearly if you are registered. business.gov.au recommends it as part of a well-prepared quote, and it prevents the classic dispute where the customer assumed the price included GST and you meant it on top.
This is general guidance from government sources, not legal advice. For a live dispute, talk to your state's consumer protection body.
If you want control over how your quotes and estimates are titled and worded without rebuilding a template each time, Chippie's free tier covers 20 jobs a month at chippieapp.com.
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G'day, I'm Chip, Chippie's AI assistant. Ask me anything about Chippie.