What Costs Should I Include?
Consider insurance, software, vehicle costs, workspace, marketing, accounting, licences, equipment and other ongoing operating costs.
Formulae shown
Hourly Rate Calculator
Work out the hourly rate your business needs to charge to cover costs and reach your income target. Enter your desired annual income, business overheads and realistic billable hours to calculate an hourly charge-out rate before and after GST.
Business Parameters
AUD $
The annual amount you want the business to generate for your labour before personal income tax.
AUD $
Include software, insurance, vehicle, accounting, phone, licences, marketing and workspace costs.
hrs / wk
Hours realistically invoiced to clients, not total hours worked.
weeks
Allow for leave, illness, training and non-billable gaps.
%
Adds a profit allowance above target income and overheads.
AUD $
Calculated hourly rateLive
$146.29/ hr
Customer rate incl. 10% GST
Hourly Rate ex GST$132.99 / hr
Annual Revenue Required$152,941
Annual Billable Hours1,150 hrs
Target Annual Income$100,000
Annual Overheads$30,000
Profit Allowance15% ($22,941)
Based on $100,000 target income, $30,000 overheads and 1,150 billable hours, the calculated rate is $132.99 per hour before GST. With GST added, the customer rate is $146.29 per hour.
Billable capacity
Billable Hours Are Not the Same as Working Hours
Total working time
Includes proposals, invoicing, bookkeeping, marketing, travel, training and administration.
Billable time
Only hours tied to client work and invoices generate the revenue used in this calculation.
Caution: Overestimating billable hours lowers the calculated rate and can create a revenue shortfall.
Gap analysis
Below calculated rate by $22.99How Does Your Current Rate Compare?
Current Rate$110.00
Calculated Rate$132.99
Hourly Rate Gap+$22.99
Annual Revenue Gap+$26,441
At $110.00 ex GST, annual billable revenue would be approximately $126,500. The calculated revenue requirement is $152,941.
Scenario & Sensitivity Analysis
See how capacity, income targets and overhead changes affect the required hourly rate.
Impact of Billable Hours
| Weekly | Annual | Rate |
|---|---|---|
| 15 hrs | 690 | $221.65 |
| 20 hrs | 920 | $166.24 |
| 25 hrs | 1,150 | $132.99 |
| 30 hrs | 1,380 | $110.83 |
| 35 hrs | 1,610 | $94.99 |
Target Income Sensitivity
| Scenario | Target | Rate |
|---|---|---|
| -10% | $90,000 | $122.76 |
| Current | $100,000 | $132.99 |
| 10% | $110,000 | $143.22 |
| 20% | $120,000 | $153.45 |
Overhead Inflation Impact
| Scenario | Cost | Rate |
|---|---|---|
| Current | $30,000 | $132.99 |
| +10% | $33,000 | $136.06 |
| +20% | $36,000 | $139.13 |
| +30% | $39,000 | $142.20 |
Equivalent Day Rate
Day rate ex GST$1,063.94
Day rate incl GST$1,170.33
Project Price Estimator
Labour ex GST$1,595.91
Customer total incl GST$1,755.50
Labour only. Add materials, subcontractors and project expenses separately.
Transparent formulae
How the Calculation Works
Step 1 — Annual Billable Hours
Hours per Week × Working Weeks
Step 2 — Baseline Cost Pool
Target Income + Annual Overheads
Step 3 — Required Revenue
Cost Pool ÷ (1 − Target Margin)
Step 4 — Hourly Rate ex GST
Required Revenue ÷ Billable Hours
Step 5 — Customer Rate
Hourly Rate × 1.10 where GST applies
Worked Example: Australian Service Consultant
A consultant targets $90,000 annual income, has $25,000 annual overheads, expects 24 billable hours across 46 working weeks and allows a 10% profit margin.
Billable capacity1,104 hours
Cost pool$115,000
Required revenue$127,777.78
Hourly rate ex GST$115.74
With 10% GST added, the customer rate is approximately $127.31 per hour. This is a mathematical reference based on the stated assumptions, not a guarantee of income or profitability.
Essential Australian Pricing Guidance
Important considerations when applying the result.
Your Charge-Out Rate Is Not Your Wage
A customer rate also needs to fund non-billable time, overheads, leave, business risk and any selected profit allowance.
Hourly or Per Project?
An internal hourly baseline remains useful when quoting fixed-price work because it helps test whether the scope can cover time and costs.
A Financial Reference Point
The calculator works from your inputs. It does not know competitor rates, market demand, client value or whether the resulting rate is commercially achievable.
Frequently Asked Questions
Practical answers about hourly rates, billable capacity, costs and GST.
What is a realistic number of billable hours per week?
For many full-time sole traders and small service businesses, 20 to 28 billable hours per week can be more realistic than total hours worked. Administration, quoting, marketing, travel and professional development also consume time.
How do I factor in superannuation when calculating my hourly rate?
Include the superannuation contribution you want to fund within your target annual income. This keeps the calculation focused on the total amount your work needs to generate for you.
How many working weeks should I use?
Use the number of weeks you realistically expect to invoice clients after allowing for holidays, public holidays, illness, training and quiet periods. Many businesses begin with 46 to 48 weeks.
Why add a profit margin if I am a sole trader?
Target income pays for your labour. A separate business profit allowance can help fund equipment replacement, slow periods, bad debts and future investment.
Do I add GST to my hourly rate?
If GST applies to your supply, calculate the commercial hourly rate first and then add 10% GST to the customer rate. This calculator keeps profitability calculations on an ex-GST basis.
What if the calculated rate is higher than competitors charge?
The result is a financial reference point based on your inputs, not a market recommendation. Compare it with market demand, client value and competitor pricing, then review costs, billable capacity or service packaging if needed.
How often should I review my hourly rate?
Review it at least annually and whenever income goals, overheads, billable capacity or service positioning change materially.
Can I charge different hourly rates to different clients?
Yes. Businesses often vary rates for urgency, complexity, risk, retainers or guaranteed volume. Use the calculated rate as an internal reference when assessing each arrangement.
How does personal income tax affect this calculation?
Target annual income is entered before personal income tax. The calculator does not estimate personal tax, so allow separately for tax obligations and seek professional advice for your circumstances.
What is the difference between employee salary and target income?
An employee salary is paid under an employment arrangement. Target income here is an owner-defined amount that business revenue must support after overheads and before personal income tax.
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Markup Calculator
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GST Calculator
Add, remove or isolate Australian GST.
Know the rate your numbers require.
Now calculate how many jobs or sales you need to cover your costs.
General information only. Results depend on the figures entered and do not include personal income tax or costs not entered. This calculator is not financial, accounting or tax advice.