The hourly rate that actually covers your income, your overheads and a real profit margin — worked out from your numbers, not a guess.
What your hourly rate needs to be — not what you hope it is.
Overheads: ute, fuel, insurance, tools, licences, phone, accounting, super. Billable hours are the ones you invoice — quoting, driving and paperwork aren't billable, which is why it's not 40.
A guide only — it doesn't replace advice from your accountant. Check your award or market rates before quoting below them.
If any of these aren't in your rate, you're paying for them out of your own wage.
The wage you want, plus what an employer would normally pay on top: super, sick days, annual leave and public holidays. As a subbie, nobody funds those but you.
Ute and fuel, tools and repairs, public liability and income protection insurance, licences and tickets, phone, software, accounting and workwear. Most sole traders land between $25,000 and $50,000 a year.
Quoting, invoicing, driving between jobs and chasing payments aren't billable — your rate absorbs them. Then add a margin on top: profit is what pays for slow weeks, new gear and growing the business.
Your charge-out rate is the hourly rate you bill clients — not your wage. It has to cover your target income plus every business cost (vehicle, tools, insurance, licences, super, admin time) plus a profit margin, spread across only the hours you can actually invoice.
Add your target annual income and annual business overheads, divide by your billable hours per year (weeks worked × billable hours per week), then add a profit margin. Example: ($120,000 + $35,000) ÷ (46 weeks × 30 hours) = $112/hr break-even, or about $129/hr with a 15% margin.
Because an employee's wage comes with paid leave, super, tools, a vehicle and zero idle time — all paid by the boss. As a subbie you fund all of that yourself, and you can't invoice time spent quoting, driving or doing paperwork. A charge-out rate of roughly double your old wage is normal, not greedy.
Only the hours you can put on an invoice. Most sole traders working a 40–50 hour week bill 25–32 of them once quoting, travel, supplier runs and admin are taken out. Overestimating billable hours is the most common reason tradies undercharge.
Quote and compare rates excluding GST, then add 10% on your invoices if you're registered (required once turnover passes $75,000). GST you collect isn't income — it goes straight to the ATO, so never treat it as part of your rate.
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