Why your charge-out rate isn't your old wage
The biggest mistake new sole traders make is charging close to what they earned as an employee. If you were on $45/hr as a wage, charging $55/hr "to add a margin" will quietly send you broke — because as your own boss you now pay for everything the boss used to cover.
Your charge-out rate has to fund three things: the income you want to take home, plus every business cost (insurance, tools, vehicle, fuel, phone, software, accountant), plus the fact that you can't bill 40 hours a week. That's why a realistic tradie charge-out rate is usually 2 to 3 times an equivalent wage.
Billable hours vs hours worked
You might be on the job 45 hours a week, but you can't invoice all of them. Quoting, driving, buying materials, chasing payments, paperwork and dead time between jobs aren't billable. Most solo tradies bill 20–30 hours of a 40-hour week. The calculator uses billable hours on purpose — charging as if every hour is billable is the fastest way to undercharge.
The maths it's doing
- Pay = the income you want + the super you pay yourself
- Overheads = the eight cost lines added up
- Revenue needed = (pay + overheads) × (1 + profit% + buffer%)
- Billable hours a week = hours worked − quoting − admin − travel
- Billable hours a year = that × (52 − weeks off)
- Charge-out rate = revenue needed ÷ billable hours a year
Two things this deliberately does not do. It does not take tax off — the income figure you enter is before tax, and what to set aside is a separate question with its own tool (tax set-aside calculator). And it does not add GST into the rate: if you are registered you quote ex GST and add 10% on top, which is the row underneath.
A worked example
The defaults, followed through, so you can check the tool against your own arithmetic.
| Step | Working | Result |
|---|---|---|
| Income you want | — | $85,000 |
| Super at 12% | $85,000 × 0.12 | $10,200 |
| Overheads | 9,000 + 5,200 + 2,600 + 3,000 + 1,800 + 2,200 + 1,200 + 1,000 | $26,000 |
| Subtotal | 85,000 + 10,200 + 26,000 | $121,200 |
| Profit 10% + buffer 3% | $121,200 × 0.13 | $15,756 |
| Revenue needed | 121,200 + 15,756 | $136,956 |
| Billable hours a week | 45 − 5 quoting − 4 admin − 6 travel | 30 hrs |
| Working weeks | 52 − 6 off | 46 weeks |
| Billable hours a year | 30 × 46 | 1,380 hrs |
| Charge-out rate ex GST | 136,956 ÷ 1,380 | $99/hr |
Note the shape of it: the tradie works 45 hours and bills 30 — a 67% billable ratio, which is a good one. At 25 billable hours the same business needs $119/hr for the identical take-home. Nothing about the work changed; only the admin did.
Charging out someone else's time
The calculator above prices your hour. An employee's hour works the same way with one difference that catches people out: you pay for their hour whether or not it gets billed. Your own unbilled hour costs you opportunity; theirs costs you cash.
So the sequence is: work out what they actually cost per billable hour — wage, super, workers comp, their gear, and the hours nobody can invoice — then set a charge-out rate above it that also carries a share of the business overheads and a margin. The employee cost calculator does the first half and hands the figure straight to this page.
What this page deliberately will not do is tell you what you are legally required to pay. Award rates and classifications are published by the Fair Work Commission, they depend on the work rather than the job title, and they change each 1 July — see hiring your first employee for how to find the right one, and where our data comes from for what Yamate will and will not tell you about published rates.
Set it once, and every quote uses it
You have a number. The part that costs money is re-deriving it in your head on every job, or quoting off the old one for another six months. Yamate stores your rate and your saved prices, so the figure above lands in each quote by itself.
Save this rate in Yamate → Free to try · no card · sign in with a link, no password to rememberFAQ
What's a good hourly rate for a tradie in Australia?
Most solo tradies need a charge-out rate of $80–$150+ per hour (ex GST) to actually make a living once overheads and non-billable time are covered. The right number turns on your own costs and the income you want, so use the calculator with your own numbers rather than copying someone else's rate.
Should I charge by the hour or quote a fixed price?
Many tradies quote fixed-price per job (customers prefer the certainty), but you still need your true hourly rate to price those quotes properly. Work out your rate here, then build it into your quotes.
Do I include GST in my hourly rate?
Quote your rate ex-GST, then add 10% if you're registered. Don't bury GST inside the rate or you'll undercharge by 10%.
More free tools for tradies
Now put the rate into a quote
A rate is only worth having if it reaches the customer. Each of these builds a priced quote with GST and a deposit, free and with no sign-up:
Just starting out? The whole setup sequence is on going out on your own.
General information for Australian businesses, not tax, legal or financial advice. Every figure here is an estimate based on the numbers you enter, and your real numbers depend on your trade, your location and your costs. The result is a floor for covering your own costs, not a recommended price — and it is not a substitute for advice from your accountant.