How the charge-out rate is worked out
- Yearly cost: pay + super and on-costs + overheads.
- Billable hours: 52 weeks of work days, minus leave, sick days and public holidays, times your billable %.
- Break-even rate = yearly cost ÷ billable hours.
- Charge-out rate = break-even ÷ (1 − profit margin). Add 10% GST if you’re registered.
Sources
Other countries: Australia · New Zealand · United States. More: profit margin calculator and the invoice generator.
Quick answers
Why is my charge-out rate so much higher than my wage?
Because you can’t bill every hour you work, and the business pays costs a wage doesn’t: vehicle, tools, insurance, phone, accounts, and leave. A $45 wage often needs a charge-out rate of $90 to $130 to break even and make a profit, depending on how many hours are billable.
What is a good billable percentage?
Most tradies bill 60–80% of the hours they work. The rest goes on quoting, travel, buying materials, admin and call-backs. Being honest about this number matters more than anything else in the calculator.
What super do I need to include?
For employees, the super guarantee is 12% of ordinary time earnings from 1 July 2025. As an owner-operator you’re not always required to pay yourself super, but it’s wise to build it into your rate.
How much leave should I allow for staff?
The National Employment Standards give full-time employees 4 weeks of paid annual leave and 10 days of paid personal/carer’s leave a year, plus public holidays, which vary by state. Your award may add more.