Hourly rate calculator for Australian sole traders

Your hourly rate is not your wage divided by 40

The number that ruins sole traders is the one borrowed from a payslip. If you were on $45 an hour as an employee, charging $45 an hour on your own ABN is a pay cut of roughly half — because a wage is what is left *after* someone else has paid for everything around it.

As an employee, someone else carried your superannuation, your annual leave, your sick days, your public holidays, your tools, your vehicle, your insurance, your phone, your training and the hours you spent quoting rather than working. On your own ABN, every one of those comes out of the rate you charge.

1. Start with what you need to earn — the amount that has to reach you for the year, before tax.
2. Add what the business costs to run — insurance, vehicle, tools, phone, software, accountant, registrations.
3. Add super for yourself. Nobody else is putting it in.
4. Subtract the hours you cannot bill. Quoting, invoicing, driving, chasing payment, buying materials, fixing the ute.
5. Divide. What is left is the rate that actually funds the year you planned.

The billable hours problem

This is where most rate calculations quietly fail. A 40-hour week is not 40 billable hours. Between quoting, invoicing, driving between jobs, the supplier run and the phone calls, a working sole trader who bills 60–70% of their hours is doing well. Tradies with a lot of travel between small jobs often sit lower.

The arithmetic is brutal and worth seeing plainly. Say you need $120,000 a year to cover income, costs and super, and you work 46 weeks:

Nothing changed except honesty about the unbillable half of the week — and the rate doubled. Guessing high on utilisation is the single most common reason a busy year still ends with no money in the account.

Once you have a rate, the billable hours calculator turns a day's start, finish and break into the hours you actually bill, and carries them straight into an invoice.

Super, leave and the year you do not work

A sole trader is not obliged to pay themselves superannuation, and personal contributions to your own fund may be claimable as a deduction — which is exactly why so many skip it and arrive at sixty with nothing. Treat it as a cost of the year, not a leftover. The employee comparison is a fair yardstick: employers pay a legislated percentage of ordinary earnings on top of a wage, so leaving yourself at zero is choosing a worse deal than the one you left.

The same goes for time off. Four weeks of holidays, a fortnight of public holidays and a week of illness is roughly six weeks the business earns nothing. That is why the calculator asks for working weeks rather than 52 — the six weeks you do not work still have to be funded by the weeks you do.

A contingency percentage covers what the plan cannot see: the quote that came in under, the warranty return, the week rained out. It is not padding; it is the difference between a rate that survives an ordinary year and one that only works if nothing goes wrong.

Charging it without losing the job

A rate is a private planning number. What the customer sees is a price for the work, and most Australian customers would rather hear "$1,450 to do the lot" than "$110 an hour, probably thirteen hours". A fixed price transfers the risk of a slow day to you and the certainty to them — which is what they are paying for.

Use the rate to build the price, then quote the price. The job quote calculator takes your hours, materials, travel and margin and produces the client-facing number, keeping the workings private. For call-out work with a minimum charge, the call-out fee calculator does the same for the first hour on site.

And review it yearly. Insurance rises, fuel rises, materials rise. A rate set three years ago is quietly a pay cut today.

Common questions

Should my hourly rate include GST?

Work out the rate excluding GST — that is the money that funds the business. If you are registered for GST, add 10% when you quote or invoice. The calculator shows both so you can advertise whichever your customers expect.

What billable percentage should I use?

Most working sole traders land between 60% and 75%. If you have never tracked it, start at 65% and correct it after a month of honest records — the number is usually lower than people expect, not higher.

How much should I allow for business costs?

Add up what you actually spend for a year: insurance, vehicle and fuel, tools and replacements, phone and internet, software, accountant, registrations, licences. Recording expenses as you go makes this a lookup instead of a guess.

My rate came out higher than everyone else charges. What now?

It usually means one of three things: the target income is high, the billable share is low, or the local rate genuinely does not fund a business. The first two you can adjust; the third is worth knowing before you commit a year to it.

Do I have to charge the same rate to everyone?

No. Many trades run a standard rate, a higher after-hours or emergency rate, and a lower rate for long committed jobs. The calculator gives you the floor each of those has to clear.