Hourly Rate Calculator
Calculate the minimum hourly rate you need to charge to cover all your costs, pay yourself a salary and hit your profit target. Most contractors charge too little because they forget overheads and non-billable time.
🔨 Hourly Rate Calculator
📐 How It Works
Your hourly rate must cover your desired income, all business overheads, and a profit margin — all divided by the number of hours you can actually bill. The critical variable is billable hours — most contractors only bill 60–75% of working hours after travel, admin, quoting and non-productive time.
📋 Worked Example
Electrician wants $120,000 take-home, $45,000 overheads, 220 days × 6 billable hours = 1,320 hrs, 20% profit target. Base = $165,000. With profit = $165,000 ÷ 0.80 = $206,250. Rate = $206,250 ÷ 1,320 = $156.25/hr minimum charge rate.
❓ Frequently Asked Questions
Most sole trader contractors achieve 4–7 billable hours per working day after accounting for travel, quoting, admin, site meetings and non-productive time. 6 hours per day (1,320/year) is a realistic target for many trades. Don't plan for 8 billable hours — you'll undercharge every job.
Vehicle costs (registration, insurance, fuel, servicing), public liability and tools insurance, accounting and bookkeeping, phone and software, tool replacement and maintenance, marketing and advertising, protective equipment, trade licences and memberships. Total overheads for most sole traders: $30,000–$80,000/year.
Your calculated rate is ex-GST. Add 10% GST on top when quoting clients. For example, a $120/hr rate becomes $132/hr inc. GST on your invoice. The GST is collected on behalf of the ATO — it's not your income.
Most contractors dramatically underestimate their true overheads and overestimate billable hours. Running a trade business costs $40,000–$100,000/year in overheads before you pay yourself. Factor in superannuation (11.5%) on your own income, income tax, and the reality that you won't bill every hour you work.