Sep 25,2025 | Results Measurement and Incentives,Strategy and Goals

The No-BS Way to Set Your Charge-Out Rate (Australia, 2025 Update)

The No-BS Way to Set Your Charge-Out Rate (Australia, 2025 Update)

If you’re still setting your charge-out rate by guessing what your competitors charge or just adding a bit on top of wages, you’re probably undercharging — and funding your clients’ holidays instead of your own.

This guide gives you the no-BS method to work out your real hourly rate so you:

  • Cover all your costs

  • Earn a profit on top

  • Stop working hard for peanuts

And yes, we’ve built a free interactive calculator right in this post ⬇️ — so you can crunch the numbers in seconds.

Download the Charge-Out Rate Calculator ⬇️

Why Tradies Undervalue Their Time (and How to Stop)

(Jump to Interactive calculator ⬇️)

Most tradies think about wages only. But there’s a difference between:

  • Paid hours: the hours you pay your team (including holidays, sick leave)

  • Billable hours: the hours you actually invoice clients for

When you charge based on paid hours instead of billable hours, you miss the fact that:

Your 52 weeks of wages are covered by only ~48 weeks of billable time.

This is why most tradies unknowingly undercharge by 15–25%.

The Formula (Plain English Version)

 

Here’s the formula we use:

Charge-Out Rate = (Annual Wages + On-Costs + Overheads) ÷ Billable Hours ÷ (1 − Profit Margin)

Where:

 

  • Annual Wages = Hourly rate × paid hours × paid weeks

  • On-Costs = super, leave loading, insurance, workers comp, payroll tax etc. (20–30% typical)

  • Overheads = rent, vehicles, admin wages, tools, software

  • Billable Hours = hours × billable weeks × % you actually invoice

  • Profit Margin = the % you want left after covering all costs

 

Try the Interactive Calculator

Ready to see your real charge-out rate?

Use the calculator below:

Charge-Out Rate Calculator (AU)

Uses Paid Weeks for wage cost (e.g., 52) and Billable Weeks for recovery (e.g., 48).

On-cost = super, leave loading, insurance, workers comp, payroll tax, uniforms, training, etc. Choose 20–30% if unsure (25% typical, 30% safe).
Labour cost per billable hour$0.00 Overhead per hour (allocated to billable hours)$0.00 Subtotal cost per hour$0.00 Target profit margin0%
Recommended charge-out rate
$0.00 / hr

  • Enter your numbers

  • See the real charge-out rate instantly

  • Test different scenarios

Pro Tip: Adjust the billable weeks or billable % and watch the hourly rate change.

Want the Full Calculator that links to your Xero numbers?

The calculator above is simple and quick.

But if you want:

  • Multi-staff cost breakdowns

  • Accurate results based on real numbers from Xero

  • Full profit margin analysis

We’ve built a downloadable Charge-Out Rate Quote Wizard that does all the heavy lifting for you.

Get the Full Calculator Here (Free) → Job Quote Wizard

Next Step: Get Your Pricing Reviewed

Numbers are one thing — profit is another.

Book a free 15-min Pricing Review Call and let us:

  • Check your current charge-out rate

  • Show you what it should be

  • Give you a plan to fix it (if needed)

Book Your Free Pricing Review → Find Hidden Profit

 

FAQs: Charge-Out Rates for Tradies (AU)

How do I set my charge-out rate in Australia?

Use: (Annual Wages + On-Costs + Overheads) ÷ Billable Hours ÷ (1 − Profit Margin). The calculator above does this for you.

How many billable weeks should I use?

Most teams only bill ~48 weeks due to leave and downtime. Start with 48 and adjust if you know your figure.

What’s a good profit margin for tradies?

Many healthy trade businesses target 15–20% net on labour revenue, depending on overheads and mix.

What counts as on-costs?

Super, leave loading, insurance, workers comp, payroll tax, uniforms, training, etc. 20–30% is typical.

 



More Content

Contact Us