What Should You Charge Per Hour?
Most tradies set their rate by looking at what the bloke down the road charges. That number has nothing to do with your overheads, your hours or the income you actually need. This works it out from your own figures.
Five sliders. Nothing is sent anywhere and your figures stay in your own browser.
Hourly Rate Calculator
Your figures stay in your browser. Nothing is sent to us.
Before tax. Super and tax are added with the provision slider below.
Vehicle, insurance, tools, software, phone, licences, accounting.
Only hours you invoice. Not driving, quoting or paperwork.
Take off holidays, sick days and the Christmas shutdown.
Added on top of your target income. Ask your accountant what suits your structure.
Covers overheads, your income and the super and tax provision across your billable hours.
An estimate from the figures you entered, not financial or tax advice. Rates are shown excluding GST. The super and tax provision is a percentage you choose; the calculator does not know your tax position, so confirm it with your accountant.
What the Three Rates Mean
The calculator gives you a rate to charge, a day rate built from it, and a break-even rate that shows where you start losing money.
Rate to charge
The hourly figure that covers your overheads, pays you the income you set, and puts aside your super and tax provision, spread across the hours you can actually bill. Anything below this and one of those three is being short-changed.
Break-even rate
The rate that covers overheads and pays you your target income, but sets nothing aside for super or tax. Charge this and the business looks fine until the tax bill arrives. It is the floor, not a target.
Billable hours are the whole game
Quoting, driving, buying materials, invoicing and chasing payment are hours you work but cannot bill. The fewer billable hours you have, the higher your rate has to be. This is why a forty-hour week rarely means forty billable hours.
How the Rate Is Worked Out
Four steps, all visible. Check them against your own accounts.
Billable hours per year
Billable hours per week multiplied by the weeks you work. Holidays, sick days and the Christmas shutdown come off the weeks, not the hours.
Super and tax provision
Your target income multiplied by the provision percentage you set. This is the amount put aside on top of what you pay yourself.
Revenue the business needs
Target income, plus the provision, plus annual overheads. This is what the year has to bring in before you have hit your goal.
Divide by billable hours
Revenue needed divided by billable hours per year gives the hourly rate. The day rate is eight of those hours. Break-even leaves out the provision.
Where Tradies Get the Rate Wrong
Three mistakes that show up again and again when a trade business works out its hourly rate for the first time.
Forgetting what the ute really costs
Fuel is the visible part. Registration, insurance, servicing, tyres, the loan or lease repayment and the eventual replacement all belong in overheads. Add tools, phone, software, public liability, income protection, licences and accounting fees. The total is usually a lot bigger than the first guess.
- Go through twelve months of bank statements, not memory
- Include the replacement cost of tools and the vehicle, spread across the year
- Software subscriptions are small individually and large together
- Insurance premiums often come out annually and get forgotten
Counting hours you cannot bill
Driving between jobs, site visits for quotes that do not land, supplier runs, evening paperwork and chasing invoices are all work. None of it is billable. If you count them as billable, your rate comes out too low and the shortfall appears at the end of the year as money that should have been there.
- Track one normal week honestly and count only hours you invoiced
- Quoting time is unbillable unless you charge for quotes
- Travel is only billable if the customer is paying for it
- Admin done at night is still unpaid time
Treating super and tax as optional
A sole trader has nobody putting super in for them and nobody withholding tax. If the rate does not include a provision for both, the money gets spent during the year and the bill lands with nothing behind it. Setting a percentage aside on every invoice is the simplest way to avoid that.
- Put the provision in a separate account the day you get paid
- Ask your accountant what percentage suits your structure and income
- The percentage is on top of your income, not taken out of it
- Revisit it once a year when your income changes
Next Steps
Emergency Callout Fee Calculator
Now you have an hourly rate, work out what to charge for an after-hours callout.
Price a callout →Tradie Business Admin Audit
See how many of your unbillable hours are admin that could be handed off.
Audit your admin →Quote Follow-Up Value Calculator
A good rate is worth nothing on quotes that go cold. See what following up is worth.
Check your quotes →Frequently Asked Questions
Is the target income before or after tax?
Treat it as the amount you want to pay yourself before tax, and use the provision slider to add super and tax on top. That keeps the two things separate so you can see what each one does to the rate. If you prefer to think in take-home terms, set a higher provision percentage to cover the gap. The calculator does not know your tax position, so the provision is a figure you choose, ideally with your accountant.
What percentage should I put aside for super and tax?
It depends on your business structure, your income and whether you have other earnings, so there is no single right answer and this tool does not try to give one. The Australian Taxation Office publishes the current super guarantee rate and the income tax rates and thresholds, and your accountant can turn those into a percentage that suits you. Whatever you settle on, put it aside on every payment rather than at the end of the year.
Why is my rate so much higher than what I currently charge?
Usually one of two things. Either your billable hours are lower than you assumed, because driving, quoting and admin were being counted as work hours, or your overheads are larger than you thought once the vehicle, insurance and tools are properly included. Both are common. The number the calculator gives is not a mistake, it is what the business needs. If it is well above the market, the options are to raise the rate, increase billable hours, or reduce overheads.
How do I work out my billable hours per week?
Take a normal week and add up only the hours you actually invoiced to a customer. Do not count travel unless you bill for it, do not count quoting unless you charge for quotes, and do not count evenings spent on paperwork. For most sole operators the answer is well below the hours they are on the job, which is exactly why the rate needs to be higher than it looks.
Should the day rate just be eight times the hourly rate?
That is what the calculator does, and it is a reasonable starting point. Some tradies discount a full day slightly because it saves travel and quoting, and others charge a premium because a day booked is a day they cannot take other work. Either is defensible. The point of the figure here is to give you the eight-hour baseline so any discount you offer is a decision rather than an accident.
Does this send my figures anywhere?
No. Everything is calculated in your browser and nothing is transmitted to us. Your slider positions are saved in your own browser so they are still there if you come back, and the reset button clears them. There is no sign-up and no email required.
Sources and further reading
Charging the Right Rate Is Half the Job
The other half is getting quotes out at that rate before the customer books someone else. Tell us your trade and we will show you how the quote can go out from the call.