{
  "$schema": "https://soudcoh.com/tools/data/index.json",
  "slug": "charge-out-rate-calculator",
  "name": "Charge-out rate",
  "category": "Pricing and capacity",
  "url": "https://soudcoh.com/tools/charge-out-rate-calculator",
  "dataUrl": "https://soudcoh.com/tools/data/charge-out-rate-calculator.json",
  "currency": "AUD",
  "updated": "2026-08",
  "summary": "Work out the hourly rate that covers your income, your overheads and the hours you can genuinely bill — with the GST-inclusive figure a customer would be quoted.",
  "whatItDoes": [
    "Adds what you need to take home to what the business costs to run, and divides by the hours you can genuinely bill.",
    "Applies your target margin on top, and shows the GST-inclusive figure a customer would actually be quoted.",
    "Shows how badly the rate moves when billable hours fall, which is the risk almost every rate is set without noticing."
  ],
  "howToUse": [
    "Enter what you need to take home before tax, and every fixed cost the business carries in a year: vehicle, insurance, tools, phone, accounting, software, rent.",
    "Enter the hours you actually bill in a normal week. Quoting, travel, invoicing and materials runs do not count.",
    "Enter the weeks you work after holidays, public holidays and sick days.",
    "Set the margin you want on top of covering costs, then read the customer-facing rate."
  ],
  "formula": [
    "Money to recover = income needed + annual overheads",
    "Billable hours a year = billable hours a week × weeks worked",
    "Break-even rate = money to recover ÷ billable hours",
    "Charge-out rate = break-even rate ÷ (1 − target margin)"
  ],
  "interpret": [
    "The break-even rate is not a price. It is the rate at which you have worked a full year for exactly the income you entered and nothing else — no reinvestment, no bad debts, no quiet month.",
    "If the rate comes back far above what you currently charge, the gap is almost always in billable hours rather than in greed. Most people bill far fewer hours than they work.",
    "Test the rate against a drop of five billable hours a week before committing to it. That is a normal amount of variation and it moves the number a long way."
  ],
  "limitation": "This is a labour rate. It does not price materials, markup on supplied goods, callout fees or after-hours premiums, all of which change what a job actually earns. It also assumes you fill every billable hour, which the capacity planner will tell you whether you can.",
  "inputs": [
    {
      "key": "income",
      "label": "What you need to take home",
      "kind": "currency",
      "default": 110000,
      "min": 0,
      "max": 10000000,
      "unit": "AUD",
      "help": "Before tax, for the year. Your wage, not the business's profit.",
      "sourceId": null,
      "sourceNote": null,
      "options": null
    },
    {
      "key": "overheads",
      "label": "Annual business overheads",
      "kind": "currency",
      "default": 48000,
      "min": 0,
      "max": 10000000,
      "unit": "AUD",
      "help": "Vehicle, fuel, insurance, tools, phone, accounting, software, rent, licences. Everything you pay whether or not you work.",
      "sourceId": null,
      "sourceNote": null,
      "options": null
    },
    {
      "key": "billableHours",
      "label": "Billable hours a week",
      "kind": "number",
      "default": 25,
      "min": 1,
      "max": 100,
      "unit": "count",
      "help": "Hours a customer actually pays for. Not hours worked — quoting, travel and paperwork are not billable.",
      "sourceId": null,
      "sourceNote": null,
      "options": null
    },
    {
      "key": "weeks",
      "label": "Weeks worked a year",
      "kind": "number",
      "default": 46,
      "min": 1,
      "max": 52,
      "unit": "count",
      "help": "After annual leave, public holidays and the weeks you lose to illness or weather.",
      "sourceId": null,
      "sourceNote": null,
      "options": null
    },
    {
      "key": "targetMargin",
      "label": "Margin on top",
      "kind": "percent",
      "default": 15,
      "min": 0,
      "max": 80,
      "unit": "percent",
      "help": "What the business keeps after your wage and overheads are covered. This is what funds the next van.",
      "sourceId": null,
      "sourceNote": null,
      "options": null
    },
    {
      "key": "gstRegistered",
      "label": "Registered for GST",
      "kind": "select",
      "default": 1,
      "min": 0,
      "max": 1,
      "unit": "count",
      "help": "Only controls whether the customer-facing rate shown includes GST.",
      "sourceId": "ato-gst",
      "sourceNote": "GST is 10% of the price of most goods and services sold in Australia.",
      "options": [
        {
          "label": "Yes — show the price a customer sees",
          "value": 1
        },
        {
          "label": "No — quote ex-GST",
          "value": 0
        }
      ]
    }
  ],
  "defaults": {
    "income": 110000,
    "overheads": 48000,
    "billableHours": 25,
    "weeks": 46,
    "targetMargin": 15,
    "gstRegistered": 1
  },
  "exampleResult": {
    "headline": {
      "label": "Charge-out rate, including GST",
      "value": "$177.80",
      "note": "$161.64 ex-GST, from $137.39 at break-even"
    },
    "outputs": [
      {
        "label": "Break-even rate",
        "value": "$137.39",
        "note": "Covers your income and overheads and nothing more"
      },
      {
        "label": "Billable hours a year",
        "value": "1,150",
        "note": "25 a week × 46 weeks"
      },
      {
        "label": "Overheads per billable hour",
        "value": "$41.74",
        "note": "$48,000 a year"
      },
      {
        "label": "Annual billings at this rate",
        "value": "$185,882",
        "note": "$27,882 of that is margin"
      },
      {
        "label": "Rate if you bill five fewer hours a week",
        "value": "$202.05",
        "note": "Same income, fewer hours to spread it across"
      }
    ],
    "workings": [
      {
        "label": "Money to recover",
        "expression": "$110,000 + $48,000 = $158,000"
      },
      {
        "label": "Billable hours a year",
        "expression": "25 × 46 = 1,150"
      },
      {
        "label": "Break-even rate",
        "expression": "$158,000 ÷ 1,150 = $137.39"
      },
      {
        "label": "With margin",
        "expression": "$137.39 ÷ (100% − 15%) = $161.64"
      },
      {
        "label": "Including GST",
        "expression": "$161.64 × 1.1 = $177.80"
      }
    ]
  },
  "shareableExample": "https://soudcoh.com/tools/charge-out-rate-calculator?income=110000&overheads=48000&billableHours=25",
  "faqs": [
    {
      "question": "How do I work out my hourly rate as a tradie?",
      "answer": "Add what you need to take home to what the business costs to run, then divide by the hours you can genuinely bill — not the hours you work. A sole trader needing $95,000 with $32,000 of overheads and 27 billable hours across 46 weeks has to recover $127,000 over 1,242 hours, which is about $102 an hour just to break even. Adding a 15% margin takes it to roughly $120, and if you are registered for GST the customer is quoted about $132. Setting the rate by looking at the business down the road skips all of that and is how trades end up busy and broke."
    },
    {
      "question": "How many hours a week can I actually bill?",
      "answer": "Fewer than you work, and usually by more than people expect. Quoting, travel between jobs, materials runs, invoicing and chasing payment all come out of the same week and none of them are billable. Measure it for a fortnight rather than estimating — this input has more effect on the rate than anything else on the page, and getting it five hours wrong changes the answer by about a fifth."
    },
    {
      "question": "Should I include my own wage in overheads?",
      "answer": "No, keep them separate, which is why there are two fields. Your wage is what you need to live on and overheads are what the business consumes regardless. Mixing them makes it impossible to see which of the two is driving the rate — and when the rate comes back uncomfortably high, that is the first thing you need to know."
    },
    {
      "question": "Does this rate include GST?",
      "answer": "It shows both. The calculation is done excluding GST, and if you tell it you are registered it adds 10% to show the figure a customer would be quoted. GST is not income — it is collected on the Australian Taxation Office's behalf — so it must never be part of the rate you are trying to live on."
    },
    {
      "question": "What is a normal hourly rate for a plumber or electrician in Australia?",
      "answer": "We are not going to publish one. The rates in circulation come from directory sites and lead-generation marketplaces with no stated methodology, and quoting a figure would set a price expectation on your business using a number neither of us can check. Your own costs and your own billable hours are the only inputs that produce a rate you can survive on, and they are the two this tool asks for."
    }
  ],
  "sources": [
    {
      "id": "ato-gst",
      "label": "Australian Taxation Office, GST",
      "publisher": "Australian Taxation Office",
      "year": "2026",
      "market": "AU",
      "method": "GST is 10% of the price of most goods and services sold in Australia.",
      "confidence": "high",
      "caution": null,
      "url": "https://www.ato.gov.au/businesses-and-organisations/gst-excise-and-indirect-taxes/gst"
    }
  ],
  "relatedTools": [
    "https://soudcoh.com/tools/capacity-planner",
    "https://soudcoh.com/tools/quote-to-win-calculator",
    "https://soudcoh.com/tools/break-even-roas-calculator"
  ],
  "licence": {
    "terms": "Free to reuse with attribution to SoudCoh and a link to the page it came from. Third-party figures remain the property of the publisher named on each row and must keep their market and year attached.",
    "attribution": "SoudCoh — https://soudcoh.com/tools"
  }
}