How Much Should a Tradie Charge Per Hour in Australia? 2026 Guide

What is a tradie hourly rate?

Your hourly rate — sometimes called your charge-out rate — is the amount your business charges for an hour of labour.

It is not the same as your hourly wage.

If you charge a customer $100 an hour, that doesn't mean you're personally earning $100 an hour.

That money may also need to cover:

• Vehicle expenses
• Fuel
• Insurance
• Tools
• Equipment
• Software
• Accounting
• Administration
• Quoting time
• Travel time
• Licences
• Training
• Advertising
• Superannuation
• Non-billable hours
• Business profit

That's why comparing your charge-out rate directly with an employee's hourly wage can be misleading.

How much should a tradie charge per hour?

There isn't one correct hourly rate for every Australian tradie.

Two carpenters working in the same city could reasonably need very different rates.

Your rate can depend on:

• Your trade
• Experience
• Qualifications
• Location
• Business expenses
• Equipment required
• Demand
• Type of customers
• Whether you're a sole trader or employ staff
• How many hours you can actually bill
• The profit you want the business to make

Instead of asking:

“What does everyone else charge?”

A better question is:

“What does my business need to charge?”

Step 1: Decide what you want to earn

Start with the amount you want the business to provide for you.

For example, imagine you'd like the business to provide $90,000 per year.

That doesn't mean your business only needs to generate $90,000. That's just the starting point.

You still need to pay the expenses required to operate the business.

Step 2: Add your annual business expenses

Write down everything the business pays for during the year.

If the owner wants the business to provide $90,000 and operating expenses are $40,000, the business already needs to generate $130,000 before additional business profit is considered.

These are example figures, not typical Australian trade expenses. Check what your income target includes, such as superannuation, so costs are not left out or counted twice.

Step 3: Work out your real billable hours

This is where hourly-rate calculations often go wrong.

You might work 40 hours a week. That doesn't mean you can invoice customers for 40 hours.

Part of the week may be spent:

• Driving
• Quoting
• Ordering materials
• Collecting supplies
• Answering calls
• Preparing invoices
• Following up customers
• Cleaning equipment
• Doing paperwork
• Managing the business

Use this example: 46 working weeks per year and 27 billable hours per week.

27 × 46 = 1,242 billable hours per year

Those billable hours need to support the entire business, including the time you spend working without sending an invoice.

Step 4: Calculate your break-even hourly rate

Desired income: $90,000. Business expenses: $40,000. Total required: $130,000. Billable hours: 1,242.

$130,000 ÷ 1,242 = $104.67 per billable hour

Around $105 per hour in this example only covers the owner's income target and listed expenses. It does not yet include additional business profit.

Step 5: Allow for profit

Business profit is different from simply paying the owner for their labour.

Profit may be needed to:

• Replace vehicles
• Upgrade equipment
• Handle unexpected expenses
• Build cash reserves
• Invest in growth
• Survive quieter periods

Imagine the business wants an additional $20,000 annual profit. Its required revenue becomes $150,000.

$150,000 ÷ 1,242 = $120.77 per billable hour

That rounds to approximately $121 per billable hour. This is an example calculation, not a recommended universal rate.

Tradie hourly rate formula

Hourly Rate = Annual Revenue Required ÷ Annual Billable Hours

Annual revenue required can include:

Desired income + annual business expenses + desired business profit

Use realistic costs and billable time for your business. This is a planning method for calculating your tradie labour rate in Australia, not an industry price list.

Why billable hours matter so much

Both businesses in this comparison need to generate $150,000 per year.

Tradie A

1,500 billable hours

$150,000 ÷ 1,500 = $100/hour

Tradie B

1,000 billable hours

$150,000 ÷ 1,000 = $150/hour

Both businesses are trying to generate the same amount, but require very different charge-out rates because their available billable hours differ.

You're probably not billing eight hours a day

Consider this example working day:

• Travel to first job: 45 minutes
• Billable work: 3 hours
• Supplier collection: 40 minutes
• Travel to second job: 30 minutes
• Billable work: 3 hours
• Travel home: 45 minutes
• Admin and quoting: 1 hour

That is 9 hours 40 minutes of work while only invoicing six hours.

Your hourly rate needs to account for the reality of non-billable work.

Should travel be included in your hourly rate?

Businesses can handle travel differently. Options could include:

• Building normal travel into the labour rate
• Charging a call-out fee
• Charging additional travel outside the normal service area
• Including travel in a fixed job price

The important point is that travel should be accounted for somewhere. Make the approach clear to the customer.

Should you charge customers hourly or quote the whole job?

An internal hourly rate remains useful even if customers receive a fixed price.

12 labour hours × $120 = $1,440 labour

Then materials, disposal, subcontractors and other costs can be added before producing the final quoted amount.

The customer does not necessarily need to see the internal hourly calculation. A clear scope and final price can be more useful.

If the work is uncertain, read Quote vs Estimate: What's the Difference for Tradies? before choosing how to present your price.

Don't forget material markup

Materials also involve costs beyond the supplier purchase price. Ordering, collection, transport and storage take time and money. Incorrect items, returns and damaged items can add more.

Allow for those costs when setting your material prices. For a practical explanation, read How to Mark Up Materials on a Trade Quote.

Don't forget overheads

Insurance, accounting, software, vehicle costs and licences may not belong to one individual job, but they still have to be recovered across the work the business performs.

Include them in your annual expenses rather than hoping there will be enough left after each job.

What if customers say your hourly rate is too high?

Customers may compare a trade business's hourly rate with their own wage, rates from several years ago, businesses with different overheads, different job scopes, friends or family, cash pricing, or another type of business entirely.

Your business still needs competitive pricing. Explain the scope, service and value clearly, and listen to useful feedback. But winning unprofitable jobs is not a sustainable pricing strategy.

Being booked out can hide underpricing

A full calendar doesn't necessarily mean the business is profitable.

If nearly every quote is accepted immediately and the business remains extremely busy but has little money left after costs, pricing may deserve review.

Check actual profit after jobs are completed. Compare the time and costs you estimated with what the job really required.

How often should you review your hourly rate?

Rates should not necessarily stay unchanged for years. Fuel, insurance, vehicles, tools, software and wages can change, as can your qualifications, experience, demand and other business expenses.

Review your numbers periodically and when significant costs change, rather than automatically using the same rate indefinitely.

Once you have a sound rate, a repeatable workflow helps you use it consistently. See How to Quote Jobs Faster Without Guessing.

Example hourly-rate calculation

Here is another illustrative example, using different income, expense and profit goals.

Goal

Owner income: $100,000

Annual business expenses

• Vehicle/fuel: $18,000
• Insurance: $5,000
• Tools/equipment: $6,000
• Software/phone/admin: $6,000
• Accounting and professional costs: $3,000
• Other overheads: $7,000

Total expenses: $45,000

Business profit target

$25,000

Total required revenue

$100,000 + $45,000 + $25,000 = $170,000

Billable time

28 hours/week × 46 weeks = 1,288 hours

Required hourly rate

$170,000 ÷ 1,288 = $131.99/hour

That rounds to approximately $132 per billable hour. The purpose is to demonstrate the calculation, not tell every tradie to charge $132 per hour.

GST treatment depends on the individual business. These planning examples do not add GST; distinguish your business revenue from GST when applying the numbers to your own quotes.

5 signs your hourly rate might be too low

1. You're constantly busy but there's never much money left.
2. Nearly every customer accepts your quotes immediately.
3. You haven't changed your rate for several years.
4. Unexpected costs regularly wipe out your job profit.
5. You're working long hours just to generate your target income.

These aren't proof of underpricing, but they are good reasons to review the numbers.

What should you include when calculating your rate?

• Target income
• Superannuation
• Vehicle costs
• Fuel
• Insurance
• Tools
• Equipment
• Repairs
• Licences
• Training
• Phone and internet
• Accounting
• Software
• Advertising
• Administration
• Quoting time
• Travel
• Holidays
• Sick days
• Non-billable hours
• Business profit

Some items affect your costs, and others reduce the hours you can bill. Account for both without counting the same expense twice.

Your hourly rate is only part of quoting

A profitable quote may also need to consider materials, travel, consumables, waste, subcontractors, equipment, overheads and job scope.

Read 10 Costs Tradies Forget When Quoting Jobs for the small costs that are easy to miss.

Use the Free Tradie Quote Template Australia guide to turn your pricing into a clear document.

Stop guessing what your time is worth

You don't need the same hourly rate as every other tradie.

You need a rate that works for your business.

Understand what you want to earn.

Understand what it costs to operate.

Work out how many hours you can realistically bill.

Then build your pricing from those numbers.

A proper hourly rate won't guarantee every job is profitable.

But it's a much better starting point than guessing.

Jirvo helps Australian tradies turn those numbers into clearer, more consistent quotes — without spending their nights buried in paperwork.