How Much Should I Charge Per Hour?

It's one of the first questions every tradie asks when they go out on their own. And almost everyone gets the answer wrong — not because they're bad at their trade, but because they're solving the wrong problem.

The common approach goes something like this: "What's a fair rate? Maybe $85 an hour? That feels reasonable." Then out comes the phone calculator. $85 × 40 hours × 52 weeks. $176,800. Sounds pretty good.

The problem isn't the hourly rate. It's the assumptions behind it. You won't work 40 billable hours a week. You won't work 52 weeks a year. And that $176,800 doesn't account for a single dollar of running costs. By the time reality hits, you're chasing your tail — and you can never quite get in front of it.

Here's a better way to think about it. Start from the end and work backwards.

Start With What You Actually Want to Earn

Before anything else, ask yourself: what would I earn as a skilled employee of someone else's business? Let's say that number is $120,000 a year.

Now ask: if I'm going to take on all the stress, risk, and admin of running my own business, what's the premium I need for that to be worth it? At minimum, 25% more. That brings your target to around $155,000 net — money in your pocket after tax, before business costs.

This is where most tradies are vague — and vague is expensive. Sit down and map out every cost of running your business for a year. Don't rush it. Take the time to be thorough.

This includes:

• Vehicle — repayments, fuel, registration, servicing
• Tools and equipment — purchases, repairs, replacements
• Insurance — public liability, income protection, vehicle
• Accounting and bookkeeping fees
• Phone, software, subscriptions
• Marketing or advertising
• Licenses, registrations, certifications
• Superannuation — don't forget to pay yourself this

For most sole traders, this number lands somewhere between $30,000 and $60,000 a year. For this example, let's use $45,000.

This is the number that surprises people most. You might think you're working 40 hours a week — but how many of those hours are you actually billing a client for?

Think about what eats into your week:

• Travel between jobs
• Quoting and admin
• Waiting on materials or access
• Running to the supplier mid-job
• Weather delays
• Chasing invoices

For many tradies — especially those doing smaller jobs or repair work — real billable hours are closer to 20 to 25 hours a week, not 40. And that's before you factor in annual leave, public holidays, sick days, and the inevitable slow weeks.

A conservative but realistic figure: 20 billable hours per week, across 45 working weeks per year.

Now Do the Calculation

With those numbers in hand, the maths is straightforward:

Two hundred and twenty-two dollars an hour. Not $85. Not $110. $222 — just to hit a modest income target with realistic assumptions.

That's not a luxury rate. That's what the numbers actually require when you account for how a trade business really operates.

What This Means in Practice

This doesn't mean you have to charge $222 an hour as a line item on every invoice. Many tradies build this into job pricing — quoting by the job rather than the hour, which also removes the anxiety customers feel when they're watching the clock.

What it does mean is that you need to know your number. Whatever your specific costs and billable hours look like, do your own version of this calculation. The result might be $180. It might be $250. But it won't be $85 — and once you see that clearly, you stop second-guessing your prices and start charging what the work is actually worth.

The tradies who struggle aren't the ones who charge too much. They're the ones who never did this calculation in the first place.