Guides

How to calculate your charge-out rate as a tradie (step by step)

Most tradies set their rate by looking at what others charge. The problem: the bloke down the road doesn't pay your ute, your insurance, or the hours you spend quoting, driving and chasing invoices.

Here's how to work out your number in five steps.

1. Start with what you want to earn

Pick a target personal income for the year. Then add retirement contributions (in Australia, the super guarantee is 12% from 1 July 2025; in NZ, the UK and the US use your KiwiSaver, pension or retirement figure).

Example: $95,000 + 12% super = $106,400.

2. Add up your annual overheads

Vehicle (fuel, rego, insurance, finance), public liability and other insurance, tools and equipment, phone and software, accounting, marketing, licences and training.

Example total: $26,600.

3. Work out how many hours you can actually bill

Working weeks × hours per week × billable %. Quoting, travel, supplier runs and admin are real work that nobody pays for directly — 70–80% billable is common for small trade businesses, but use your own.

Example: 46 weeks × 40 hours × 75% = 1,380 billable hours.

4. Break-even rate

(income + retirement + overheads) ÷ billable hours

Example: ($106,400 + $26,600) ÷ 1,380 = $96.38/hr.

5. Add profit

Your business should make a profit on top of your wage — for bad months, new tools and growth.

charge-out rate = break-even ÷ (1 − target margin)

Example with a 15% margin: $96.38 ÷ 0.85 = $113.38/hr.

If you're currently charging $85/hr in this example, you're about $28/hr short — roughly $39,000 a year.

Try it with your numbers

Use the free charge-out rate calculator — no sign-up. The PRO kit includes the same calculator inside your spreadsheet, next to your quotes.