Charge-out rate calculator for tradies
Work out what an hour has to sell for to leave you the income you actually want — after the hours you never invoice, the overheads nobody counts, and the retirement plan nobody pays you.
How the number is worked out
Every cost your business has to cover in a year gets divided by the hours you can actually invoice. That's the whole calculation — the reason most tradies undercharge is not the arithmetic, it's the two numbers that go into it.
- The hours are wrong. You work 45 and invoice 33. Quoting, chasing, ordering and driving are real work that no customer pays for, so they have to be carried by the hours that are billed.
- The year is wrong. There are 52 weeks in a year and you don't work them. Take out annual leave and public holidays and you're closer to 46 — and unlike an employee, nobody pays you for the difference.
- The costs are short. Vehicle, insurance, tools, phone, software and accounting come out before you do. So does your retirement plan, if you ever want to stop.
This gives you a floor, not a price. It's the rate at which the year works out — anything above it is profit, and anything below it means you're funding your customers' jobs out of your own income.
Why billable hours matter more than the rate
Put your own numbers in and change one thing: drop the unbillable hours by two. The rate you need falls, because the same costs are spread over more hours you can charge for.
That's usually the easier lever. Raising your rate is a conversation with every customer you have. Getting two hours a week back from quoting and chasing is a change to how you work, and it lands at the same place.