How the charge-out rate is worked out
- Yearly cost: pay + KiwiSaver and on-costs + overheads.
- Billable hours: 52 weeks of work days, minus holidays, sick days and public holidays, times your billable %.
- Break-even rate = yearly cost ÷ billable hours.
- Charge-out rate = break-even ÷ (1 − profit margin). Add 15% 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 KiwiSaver should I include for staff?
The minimum employer contribution rose from 3% to 3.5% for pay days from 1 April 2026, and is set to rise to 4% from 1 April 2028 (Inland Revenue).
How much leave should I allow?
Employees get at least 4 weeks of annual holidays and 10 days of sick leave a year after six months, plus 12 public holidays (Employment New Zealand).