Contractor Rate Calculator: How to Work Out What to Charge as a Tradie

Most tradies who go out on their own get their rate wrong. Not by a little — by a lot. They pick a number based on what they were getting paid as an employee, add a bit on top, and call it a day. Then they wonder why they’re working 50-hour weeks and still struggling to get ahead.

A contractor rate calculator does one thing: it takes the guesswork out of your charge-out rate. Feed it your real costs — super, insurance, slow periods, sick days, tools, ute — and it spits out the number you actually need to charge to make it work. Not survive. Make it work.

This article walks you through exactly how to use one, what inputs matter, and why most tradies get this horribly wrong.

Why Your Subby Rate Is Probably Too Low

Here’s the trap every new contractor falls into. You were earning, say, $45 an hour as an employee. You go out on your own and think “I’ll charge $55 — that’s more, so I’m winning.” You’re not winning. You’re behind before you start.

As an employee, your boss was covering:

• Superannuation (11.5% on top of your wage)
• Workers’ compensation insurance
• Public liability insurance
• Annual leave and sick leave entitlements
• Public holidays (you still got paid)
• Slow periods (rain days, downtime between jobs)
• Tools, vehicle, phone, admin

Now you’re covering all of that yourself. If you don’t bake those costs into your rate, you’re eating them — and they add up to a significant chunk of what you’re billing. A proper contractor rate calculator accounts for every one of these items before it gives you a number.

What Goes Into a Contractor Rate Calculator

A solid contractor calculator works from the bottom up. You start with what you need to take home — your actual living costs — and work backwards to what you need to charge per hour to make that happen.

Here are the key inputs:

• Target annual income (after tax): What do you actually need in your pocket to pay your mortgage, bills, and live your life?
• Billable hours per year: This isn’t 52 weeks × 40 hours. Subtract public holidays, annual leave, sick days, wet weather, and time spent quoting and chasing invoices. A realistic number is usually 1,400–1,600 hours.
• Superannuation: 11.5% of your gross. It’s your money — don’t leave it out.
• Insurance: Public liability (minimum $5M), plant and equipment, income protection.
• Vehicle costs: Fuel, rego, insurance, maintenance, finance repayments.
• Tools and equipment: Depreciation, repairs, replacements.
• Admin and software: Accounting, invoicing, phone, internet.
• Tax: Don’t pretend this doesn’t exist. Set aside 25–30% of gross depending on your income bracket.

Once you’ve got real numbers for each of these, the calculator converts them into a minimum hourly rate. That’s your floor — you should never charge below it. Your actual rate will be above that, depending on your trade, your market, and the premium you command.

Use the subby to salary calculator to run through these numbers quickly. It’s built specifically for Australian tradies and does all the maths for you.

Subby Rate vs. Charge-Out Rate: Know the Difference

These two terms get used interchangeably and they shouldn’t. They’re different things.

Subby rate is what you charge when you’re working under a head contractor. You’re usually paid per hour for your time. You’re not quoting the full job — you’re just billing your labour.

Charge-out rate is what you quote end clients directly. It typically includes a margin for overheads, supervision, and profit on top of your base rate.

If you’re doing both — working as a subby sometimes and going direct to clients other times — you need two different rates. Your direct client rate should be meaningfully higher than your subby rate, because you’re taking on more risk and doing more work (quoting, managing the client relationship, handling variations).

A contractor rate calculator gives you the floor for both scenarios. For direct clients, you’ll add a margin on top. The advanced tradie calculator lets you model both scenarios side by side, so you can see exactly how the numbers stack up before you commit to a rate.

How Many Billable Hours Are You Actually Working?

This is where most tradies blow their rate calculation. They assume they’ll bill 40 hours a week, 52 weeks a year. That’s 2,080 hours. In reality, you’ll be lucky to hit 1,500 billable hours in a year.

Here’s why:

• 4 weeks annual leave: Even if you don’t take it, you should be pricing it in — 160 hours gone.
• 10 public holidays: Another 80 hours.
• Sick days: Average Australian takes 8–10 sick days per year — 80 hours.
• Wet weather / can’t access site: Easily 2–3 weeks per year in Queensland and the north — 80–120 hours.
• Quoting, invoicing, chasing payments: If this isn’t taking 3–5 hours a week, you’re not doing enough of it — 150–250 hours per year.
• Travel between sites: Not always billable — 1–2 hours per day.

Run the numbers honestly and you’re down to around 1,400–1,600 billable hours per year for a solo operator. That changes your required rate significantly. If you were working from 2,080 hours and you’re actually billing 1,500, your rate needs to be 38% higher just to hit the same annual income.

GST — Add It On Top, Every Time

Once your contractor rate calculator gives you a number, that’s your rate ex-GST. Add 10% on top for GST. Always quote both — ex-GST and inc-GST — so there’s no confusion.

One thing that catches new contractors out: GST isn’t your money. The moment you hit $75,000 in annual turnover (or as soon as you register), every dollar of GST you collect goes to the ATO. It sits in a separate account. You touch it and you’re writing a cheque to the ATO at BAS time.

Set up a separate account, put 10% of every invoice in there, and never think of it as your money. Simple, but tradies get burned by this every year.

Running Your Rate Against the Market

Once you’ve got your minimum rate, you need to reality-check it against the market. If your calculation says you need $95/hr but the going rate in your trade and region is $75/hr, you’ve got a problem — but the answer isn’t to lower your rate. The answer is to look at where your costs are too high, or whether you’re targeting the right end of the market.

Rates vary significantly by:

• Trade: Electricians and plumbers typically command higher hourly rates than carpenters or labourers due to licensing requirements and risk.
• Region: Metro Brisbane or Sydney rates can be 15–25% higher than regional areas.
• Sector: Residential vs. commercial vs. industrial — different risk profiles, different rates.
• Specialisation: The more specialised your work, the more you can charge. If you’re one of three people in QLD who can do a particular type of industrial coating or rope access work, you’re not competing on price.

Talk to other tradies in your network. Check job boards. Get a feel for what the market is paying. Your rate needs to make sense to you and to your clients.

Calculate Your Rate Now — It Takes 2 Minutes

Knowing your number is non-negotiable. Guessing is how tradies get stuck in the cycle of working hard and going nowhere.

Use the subby to salary calculator to plug in your real costs and see exactly what you need to charge. It handles the super, the downtime, the tax — everything. If you want to go deeper and model multiple scenarios, the advanced tradie calculator gives you the full picture.

Two minutes now. No more wondering whether your rate is right.