Why isn't your rate just your old wage?
As your own boss you now pay for everything the boss used to cover — insurance, tools, the vehicle, fuel, phone, software, your accountant — and you can't bill 40 hours a week. That's why a realistic charge-out rate is usually 2 to 3 times an equivalent wage. It's not greed, it's the real cost of running the whole business yourself. Copying a mate's rate is how tradies underprice: a rate that works for someone with a paid-off ute and a home office can send you broke.
What three numbers set your rate?
- The income you want to take home — pick the figure, don't back into it.
- Your yearly overheads — insurance, tools, vehicle, fuel, phone, software, registrations, accountant.
- Billable hours a year — you might work 45 hours a week and bill 25. Quoting, driving, material runs, paperwork and dead time aren't billable.
Then add super and a tax buffer on top, because nobody is putting those aside for you. The sum is simple: (income you want + yearly overheads) ÷ billable hours = your minimum rate, ex GST.
What does that look like with real numbers?
| Starting out | Established solo | |
|---|---|---|
| Income you want | $75,000 | $90,000 |
| Yearly overheads | $25,000 | $35,000 |
| Billable hours a year | 1,200 | 1,000 |
| Minimum rate ex GST | $83/hr | $125/hr |
Notice what moves the answer most. Dropping from 1,200 billable hours to 1,000 adds $21/hr on its own, before a cent of extra overhead. Billable hours is the number most tradies overestimate, and it is the one that hurts. Put your own three figures into the hourly rate calculator and it returns the rate ex and inc GST.
How many hours can you actually bill?
Count a real week, not an ideal one. A solo tradie working 45 hours usually bills 25 to 30 of them. The rest goes here:
- Quoting — site visits, working up the price, and every job you don't win.
- Driving — between sites, to the supplier, to the tip.
- Buying and returning materials.
- Admin — invoicing, chasing payment, paperwork, phone calls.
- Dead time — a cancellation, weather, waiting on another trade.
Then take out annual leave, public holidays and sick days. Bill 27 hours a week across 46 working weeks and you have 1,242 billable hours a year, not the 2,000-odd a 40-hour week suggests. Use the honest figure. Every hour you assume you'll bill and don't is a discount you handed over without deciding to.
When should you put your rate up?
Review it once a year, and again whenever one of the three inputs moves. Insurance renewal jumped, the ute needed a gearbox, materials went up, you added a licence or a qualification — each of those changes the sum, and none of them change back on their own. Raise it on new quotes first, not on a customer mid-job, and give existing regulars a date rather than a surprise. The arithmetic is worth seeing: on 1,000 billable hours, putting $10 on your rate is $10,000 a year, and it changes nothing about how you do the work.
What about the "going rate" for your trade?
Four things move a published average: trade, location, experience and job type. Emergency and specialised work commands more, straightforward maintenance less, and a capital city sits above a regional town. So treat any average you read online as a sanity check on your own number, never as the target. If your cost-based rate lands well above the quoted average, the answer is usually to explain your price better, not to drop it — your costs are real, and charging under them means working hard to go backwards.
Set your rate once in Yamate — it fills every quote →FAQ
What's a good hourly rate for a tradie in Australia?
Most solo tradies need a charge-out rate comfortably above $80/hr ex GST once overheads and non-billable time are covered. Want $90,000 take-home on $35,000 of overheads and 1,000 billable hours? That's $125/hr. Run your own three numbers rather than copying someone else's rate.
Why is a tradie's hourly rate so much higher than a wage?
Because the rate has to cover your income plus every business cost plus the hours you can't bill. A self-employed charge-out rate is typically 2–3× an equivalent wage, and that's just breaking even, not getting rich.
Should I charge by the hour or by the job?
Either works, but fixed-price jobs need to be built from your true hourly rate. Customers like the certainty of a fixed price; you need your rate to set it properly.
Related
How to quote a job · Should you charge a call-out fee?
General information for Australian businesses, not financial advice. The worked figures above are arithmetic on example inputs — run your own. Rates differ by trade, location and experience.