Schedule of rates: what it is, with an example
A schedule of rates is a list of the prices you and a supplier have agreed: each item, the unit it's priced in and the rate per unit, for a set period. It doesn't say how much you'll buy. It says what each unit costs when you do, which is what makes the supplier's invoices checkable line by line.
In short
- A schedule of rates lists each item, the unit it's priced in and the rate per unit, for a set period. It fixes prices, not quantities.
- In construction it's either a contract for work measured as it's done (an SOR contract) or the rates a supplier bills your business at.
- An invoice is checked against the rates in force on its date, in the same unit, at the right price break.
Two meanings in construction
You'll meet the term in two places, and they work the same way from different ends.
- A schedule of rates contract (an SOR contract) is a contract for work where the quantities aren't known up front. The contractor prices each kind of work per unit (per metre of trench, per square metre of paving, per hour of a labourer), the work is measured as it's done, and it's paid at the scheduled rates. Councils, road authorities and other asset owners use them for maintenance and minor works, and some head contracts carry a schedule of rates for variations.
- A supplier's schedule of rates is the supply-side version: the rates a merchant, concrete or quarry supplier, plant hire firm or labour hire business bills your business at, whatever quantities you end up buying. Builders and trades agree them with the businesses they buy from again and again, instead of a new price for every order.
What goes in one
A schedule you can check invoices against has:
- each item in the supplier's own words, with their product code where they use one
- the unit each rate is per: each, metre, length, square metre, cubic metre, tonne, bag, sheet, hour, day or week
- the rate, and whether it includes GST (rates excluding GST are easier to check), with any item that carries no GST marked GST-free
- the date it applies from, and the date it ends or is due for review
- any price breaks: a lower rate from a set quantity, and the quantity it starts at
- the charges on top, each with how it's worked out: delivery, fuel levies, small-order or minimum-load fees, pallet deposits and waiting time, and for hire, the period each rate covers and any minimum hire
- whether a rate changes by job, site or delivery zone
- how prices can change during the term, and how much notice the supplier gives
A worked example (made up)
A small builder's schedule with a made-up timber and hardware merchant, agreed for the year from 1 July. Every rate is invented to show the layout, not a market price.
| Item | Unit | Rate ex GST | Price break | GST-free |
|---|---|---|---|---|
| 90x45 MGP10 pine framing | Unit: m | Rate ex GST: $6.00 | Price break: $5.70 from 500 m | GST-free: No |
| 70x35 MGP10 pine framing | Unit: m | Rate ex GST: $3.90 | Price break: | GST-free: No |
| 10mm plasterboard 2400x1200 | Unit: sheet | Rate ex GST: $16.50 | Price break: | GST-free: No |
| 75mm bugle head batten screws, box of 500 | Unit: box | Rate ex GST: $42.00 | Price break: | GST-free: No |
| Delivery to site, metro | Unit: delivery | Rate ex GST: $75.00 | Price break: Free over $2,000 of goods | GST-free: No |
Reading an invoice against it
Suppose the merchant's invoice dated 12 August bills 120 m of the 90x45 at $6.20. The schedule was in force on that date, 120 m is under the 500 m price break, so the agreed rate is $6.00 a metre: the line is 20 cents a metre over, $24.00 on the line. Whether that's worth a query depends on your own threshold, but the question is now a factual one with an answer both sides can check.
$6.20 − $6.00 = $0.20 a metre over120 m × $0.20 = $24.00 on the lineThree things trip up the comparison. The date: an invoice is checked against the rates in force on its date, so a new schedule from 1 September doesn't apply to an August invoice. The unit: framing billed per 6 m length can't be compared with a rate per metre until someone says how many metres are in a length. And the break: 600 m of the same framing is billed at $5.70, not $6.00.
The delivery line is a charge, not an item. It's agreed alongside the rates, with its own rule (here, free over $2,000 of goods), and checked against that rule rather than against a row in the schedule.
Schedule of rates, bill of quantities, schedule of values, rate card or price list
The terms get used loosely and they overlap. What each one usually means, and what it fixes:
| Document | Fixes the price per unit | Fixes the quantities | Who writes it | Used for |
|---|---|---|---|---|
| Schedule of rates (SOR) | Fixes the price per unit: Yes | Fixes the quantities: No | Who writes it: Agreed between buyer and supplier or contractor | Used for: Repeat supply, maintenance work, variations |
| Bill of quantities (BOQ) | Fixes the price per unit: Yes, once priced | Fixes the quantities: Yes, measured from the drawings | Who writes it: A quantity surveyor, priced by the tenderer | Used for: Tendering and valuing a whole project |
| Schedule of values | Fixes the price per unit: No: it splits a lump sum | Fixes the quantities: No | Who writes it: The contractor, agreed with the client | Used for: Progress claims against a lump-sum contract |
| Rate card | Fixes the price per unit: Yes, per hour, day or week | Fixes the quantities: No | Who writes it: A hire company or service provider | Used for: Plant, equipment and labour hire |
| Price list | Fixes the price per unit: Yes, the supplier's standard prices | Fixes the quantities: No | Who writes it: The supplier | Used for: Any customer, until agreed for your account |
| Quote | Fixes the price per unit: Yes, for the job | Fixes the quantities: Usually, for what's quoted | Who writes it: The supplier | Used for: One job or order, until it expires |
How it differs from a quote and a price list
The differences that matter when an invoice arrives:
- A price list is the supplier's standard prices, set by the supplier and open to any customer. It changes when the supplier changes it, and it's your agreed rate only once you've both accepted it for your account.
- A quote is a price for a particular job or order: what's being supplied, the itemised costs and an expiry date. business.gov.au notes that a quote the customer accepts becomes a legally binding contract. Its prices are usually for the quantities quoted, until the quote expires.(business.gov.au: Prepare quotes)
- A schedule of rates is unit rates agreed for your business over a period, whatever quantities you end up buying. A quote with a unit rate on every line can serve as a schedule for its job until it expires.
Schedule of rates contracts
On an SOR contract the schedule is the pricing: the contractor tenders a rate for each item of work, and the final price is the measured quantities at those rates. That puts weight on two things a supply schedule also depends on. The item descriptions have to be clear enough that everyone reads the same work into each rate, and the unit of measurement has to be set out, because a rate per linear metre and a rate per square metre are not interchangeable.
Public owners publish their own conditions and schedules for this kind of work, and each contract says how work is measured, how rates move over time and how claims are made. Read the contract you're working under rather than a general summary, and get advice on anything that affects payment.
Who keeps it
Both sides, and they should keep the same version. The supplier needs it loaded against your account, so invoices come out at the agreed rates rather than their list prices: a rate that lives in an email and never reached their system is how invoices drift. You need it wherever invoices are checked, which is often the accounts team rather than the person who negotiated it.
The guidance on business.gov.au suggests documenting the terms you negotiate with a supplier as a written contract, and keeping records of your communication with suppliers. For a schedule, that means keeping the supplier's acceptance with it, whether a signed copy or an email saying the rates are right, and every notice that changed it.(business.gov.au: Suppliers)
Keep the old version when a new one starts. An invoice is checked against the rates in force on its date, so a question about last year's invoice needs last year's rates.
Starting one
Ask the supplier for their price list for the items you use, or set one out yourself and ask them to confirm it. The free templates on this site are spreadsheets with the columns a rate check needs (item, unit, rate excluding GST, GST-free and product code), a blank one and ones for common trades, with the rates left blank for you and the supplier to agree. The blank template downloads as Excel or CSV with no account.
If you already buy from the supplier, the invoices you've paid are a good starting point. The guide to building a schedule of rates from invoices covers that, and the guide to getting a price list agreed covers the conversation with the supplier.
How CostCode uses a schedule of rates
Load a supplier's schedule into CostCode from an Excel workbook, a CSV, or a PDF price list or quote: you map the columns, review every row, and nothing is saved until you confirm. The free templates' columns load with nothing to map by hand. From then on CostCode checks each invoice line against the rate in force on the invoice date, at the right price break and in the unit agreed.
Charges sit apart from the item rates, as charge agreements on the supplier's page in CostCode, and each charge line is checked against those. A line with no agreed rate or charge shows as unverified with the reason, never as passed. A query to the supplier about a rate quotes only what they can check, and goes only when a person in your team reads it and presses send.
Questions
What does SOR stand for?
Schedule of rates: a list of agreed prices per unit, for supply or for work measured as it's done.
Is a schedule of rates the same as a price list?
Not quite. A price list is the supplier's standard prices; a schedule of rates is the rates agreed for your business, usually for a set period. A price list you've both accepted for your account does the same job, as long as it says what each rate is per.
What's the difference between a schedule of rates and a bill of quantities?
A bill of quantities lists the measured quantities of work for a whole project, priced by the tenderer, so it fixes both quantities and rates. A schedule of rates fixes only the rates; the quantities are whatever is ordered or measured later.
Should a schedule of rates include GST?
It should say either way. Rates excluding GST, with any GST-free item marked, are easier to check against invoices, and a GST slip and a rate difference then don't hide each other.
How long does a schedule of rates last?
As long as it says. Most have a start date and an end or review date. One with no end date runs until one side changes it, which is why a notice of new prices should come with the date they apply from.
Where can I get a schedule of rates template?
The templates page on this site has free Excel and CSV templates, a blank one and ones for common trades, with items and units filled in and the rates left blank to agree with your supplier.