Hourly Rate Calculator for Australian Sole Traders and Freelancers

An hourly rate calculator works backwards from the income you want to take home. Add income tax, super and business expenses to get the revenue you need, then divide by the hours you can actually bill, not the hours you work. For a sole trader who wants $90,000 in the hand, puts 12% aside for super, spends $12,000 a year running the business and bills 25 hours a week for 46 weeks, that comes to about $126 an hour plus GST, or roughly $1,009 for an eight-hour day.

How do I calculate my hourly rate?

Take the income you want after tax, add back the income tax and Medicare levy on it, add super and your yearly business expenses, then divide the total by your billable hours for the year. The result is your minimum hourly rate before GST. If you're registered for GST, you add 10% on top when you invoice.

Use the calculator below. It runs entirely in your browser and nothing is sent anywhere.

The tax figure is an estimate. It applies the 2025–26 resident rates published by the ATO (the same thresholds are listed for 2026–27) plus the 2% Medicare levy, and ignores offsets, the Medicare levy surcharge, HELP repayments and any other income you earn. Check the current ATO resident tax rates and treat the result as a floor, not a precise tax calculation.

How much should I charge per hour as a sole trader?

Charge at least enough to cover your target take-home pay, the tax on it, super and your overheads, spread over realistic billable hours. The answer is almost always well above the hourly equivalent of a salary, because an employee's leave, super, equipment and unbilled admin time are all paid by someone else.

Here is the default example from the calculator, step by step:

Super is modelled as a personal contribution you claim as a tax deduction, which is why it sits on top of taxable profit rather than inside it. The ATO confirms that sole traders don't have to pay super guarantee for themselves, so this is voluntary. The calculator defaults to 12% because that matches the super guarantee rate employers pay from 1 July 2025, so you're comparing like with like against a job offer.

In practice you'd round $126.14 up to $130 or $135 an hour. The rounding is your profit margin and a buffer for a slow month. A rate that only just covers costs leaves nothing for growth, a bad debt or a client who pays 60 days late.

How many billable hours can I actually work?

Plan on 20 to 30 billable hours a week across about 46 weeks, not 38 hours across 52. The gap is quoting, invoicing, bookkeeping, travel, learning and finding the next client, none of which a client pays for directly.

Start with 52 weeks and take out four weeks of holidays, roughly two weeks of public holidays and a week or so for sickness. That leaves about 45 to 46 weeks. Then look honestly at a normal week. A freelancer working 40 hours who spends a day on admin and sales has 32 billable hours at best, and most have fewer once gaps between projects are counted. Tradies lose time to travel, quoting site visits and picking up materials.

This is the input that moves the answer most. In the example above, dropping from 25 to 20 billable hours a week lifts the rate from $126 to about $158 an hour. If your hourly rate looks too high to sell, the fix is usually to bill more of the hours you already work, or to stop pricing by the hour for that work.

What day rate should I charge?

A day rate is your hourly rate multiplied by the hours in a standard working day, often 7.6 or 8 hours. At $126.14 an hour, an eight-hour day is $1,009.13 excluding GST, or $1,110.04 including GST.

Day rates suit contractors, consultants and creative work where hours blur and clients prefer a predictable unit. Say in writing what a day is (for example, "up to 8 hours on site, travel within 30 km included") and how you charge for a part day. Many people charge a half-day rate slightly above half the full rate, because a half day still blocks out most of the day for other work.

Some contractors quote a day rate a little below eight times their hourly rate to reward a client for booking full days. That's a commercial choice, not a rule. Run the numbers at your real billable days per year first.

Should my hourly rate include GST?

If you're registered for GST, you charge GST on top of your rate when you invoice, so a $126.14 rate becomes $138.76 on a tax invoice. If you quote or advertise prices to consumers, the Australian Consumer Law requires the displayed price to be the total price including GST. Prices shown only to other businesses can be shown excluding GST.

The ACCC's guidance on price displays says businesses must display a total price that includes taxes and unavoidable fees, and that a business displaying prices only to other businesses doesn't need to include GST in that total. In practice:

• Selling to households (a cleaner, tutor, personal trainer or electrician quoting homeowners): show "$138.76 per hour incl. GST". You can show the ex-GST figure too, but the GST-inclusive total must be prominent.
• Selling to businesses: "$126.14 + GST per hour" is normal and expected.
• Not registered for GST: don't add GST at all. Your rate is simply your rate, and your invoice should not show a GST line. Our guide to whether to add GST to your invoice covers the edge cases.

Watch the threshold. Once your GST turnover reaches $75,000 a year you must register, and if you've been pricing ex-GST to consumers without a GST buffer, registering means either absorbing 10% or putting your prices up. The calculator above flags this when your revenue target is over $75,000. See the GST registration threshold explained for how turnover is measured.

How do I price my services: hourly, day rate, fixed fee or value?

Use hourly or day rates when the scope is uncertain, fixed fees when you can define the deliverable, and value pricing when the result is worth far more to the client than your time. Your hourly rate still matters in every model, because it's the number you use to check that a fixed or value price actually pays you.

Fixed fees reward you for getting efficient. If you can paint a room in six hours that you estimated at eight, you keep the difference. The catch is scope: put inclusions, exclusions and a variation rate in writing. Our guide on how to write a quote has wording for this. For ongoing monthly work, a retainer agreement turns your hourly rate into predictable income.

Value pricing starts from what the outcome is worth to the client. A bookkeeper who saves a client a $5,000 penalty, or a copywriter whose page brings in $40,000 of sales, can charge more than the hours imply. It works best once you have results to point to.

When should I raise my rates?

Review your rate at least once a year, and raise it when your costs go up, your calendar is consistently full, or you're winning nearly every quote you send. A practical moment in Australia is 1 July, when many clients reset budgets and you can tie the increase to the new financial year.

Signs your rate is too low:

• You win almost every quote you send, with no pushback on price.
• You're booked out weeks ahead but still not hitting your income target.
• Your expenses, insurance or software costs have risen and your rate hasn't.
• You're doing more skilled work than when you set the rate, or have new licences or qualifications.

Give existing clients notice, usually 30 days, in writing. Something like: "From 1 July 2027 my hourly rate will be $145 + GST. Work booked before then stays at the current rate." New clients get the new rate straight away. If you're on a retainer or contract, check whether it has a price-review clause before you change anything.

How do I show my rate on a quote and invoice?

Show the rate, the quantity and the line total for each item, then the subtotal, GST and total. On an hourly job that looks like "Design work, 12.5 hours @ $130.00 = $1,625.00", with GST of $162.50 and a total of $1,787.50 if you're registered.

For a tax invoice over $82.50 including GST you also need, among other things, the words "tax invoice", your ABN, the date and enough detail to identify what was supplied. If you work for yourself, our guides on invoicing as a freelancer and invoicing as a sole trader walk through the layout, and the freelancer invoice template has the hours × rate columns ready to fill in.

This article and calculator are general information, not tax, financial or legal advice. Income tax is estimated using 2025–26 resident rates and the 2% Medicare levy without offsets or other income. For guidance specific to your situation, see the ATO and business.gov.au, or speak to a registered tax agent.

Frequently asked questions