Charge-Out Rate Calculator for Australian Tradies

How the calculator works

Most tradies set their rate by asking around. This does it from your own numbers instead, in three steps:

1. Count the hours you can actually bill. Start with 52 weeks, take off the weeks you will not be on the tools (leave, public holidays, sick days), then multiply by the hours a week you can invoice. Not hours worked - hours billed.
2. Add up what a year on the tools costs. Your wage with super on top, the overheads that turn up whether you are busy or not (insurance, phone, software, accounting, registration), and what the ute and your tools cost to run and replace.
3. Divide, then add margin. Total cost divided by billable hours is your true cost per hour, which is also your break-even rate. Dividing that by one minus your margin gives the rate to charge ex-GST. Multiply by 1.1 for the inc-GST figure.

What your hourly rate has to cover

An employee gets all of this paid for by the boss. When the boss is you, every one of these lines has to come out of the hours you invoice:

• Super. Under the superannuation guarantee, super is paid on top of wages. As a sole trader nobody pays it for you, so it has to be built into the rate or it never gets paid.
• Annual leave and public holidays. Under the National Employment Standards a full-time employee gets four weeks of paid annual leave plus public holidays. Self-employed, those weeks are unpaid unless the rest of the year carries them.
• Sick days. Nobody bills a day in bed. A realistic allowance stops one bad flu turning into a bad month.
• Insurance and licensing. Public liability at a minimum, often income protection and tool cover, plus licence and registration fees that fall due whether or not you are working.
• Vehicle. Fuel, rego, insurance, servicing, tyres and the eventual replacement of the ute. Spread the lot across billable hours, not calendar hours.
• Tools and equipment. Blades, batteries and consumables every week, and the big-ticket replacements that arrive every few years.
• Phone, software and accounting. The mobile plan, quoting and job-tracking software, bookkeeping and your accountant at tax time.
• Unbillable time. Quoting, site visits that go nowhere, ordering materials, driving between jobs and chasing late invoices. Every one of those hours is paid for by the hours you do bill.

Worked example: a sole-trader chippy who wants $90,000 take-home

Take a sole-trader carpenter who wants $90,000 for the year. Using the calculator's defaults: super at 12% (check the current rate with the ATO before you rely on it), 6 weeks off, 30 billable hours a week, $15,000 of overheads, $12,000 for the ute and tools, and a 20% margin.

Charge $92.61 and every hour is covered, but there is no profit in the business. At $115.76 ex-GST each hour earns a 20% margin. Notice the gap between the wage and the rate: $90,000 spread over 1,380 billable hours is only about $65 an hour, and every other line adds to it. That is why "my mate charges this much" is a poor way to set a rate. His costs are not yours.

Charge-out rate vs job margin

The charge-out rate is a per-hour number. Job margin is a per-job number. You need both. The rate makes sure every hour you invoice carries its share of the year's costs. The margin check makes sure one particular quote, with its materials, hire, subbies and the hours it will really take, still leaves profit once those costs land.

A good rate on a job that takes twice the hours you quoted is still a losing job. A tidy margin on paper, built on a rate that ignores super and leave, loses money quietly all year. Use this page to set the rate, then run each quote through the job profit margin calculator before you send it.

Once the job is running, the only way to know the margin held is to track hours and costs against it as they happen. That is what TrackYaTradie does - set the job value once, log hours and materials as you go, and watch the live margin move. For the quoting side, read how to quote a carpentry job and job costing for tradies, or see how carpenters use TrackYaTradie.

Common questions