Hourly Charge-Out Rate Calculator
Work out the hourly rate to charge clients based on your annual cost base, target profit and billable hours per year.
Your results
Calculation breakdown
- Charge-out rate
- (Annual costs + Target profit) ÷ Billable hours
Worked example
A tradesperson with $90,000 annual costs, a $30,000 profit target and 1,200 billable hours needs to charge $100 an hour, ex-GST.
Assumptions
- Billable hours should exclude admin, travel and non-chargeable time.
- The rate shown is ex-GST; add GST separately if registered.
- Review annual costs and billable hours yearly as the business changes.
How this calculator works
Enter your total annual business costs, desired annual profit and expected billable hours to calculate the hourly rate you need to charge to cover costs and hit your profit target.
Frequently asked questions
What are billable hours?
The hours you can actually charge clients for, after excluding admin, travel, training and non-chargeable time.
Should this rate include GST?
The rate shown is ex-GST; add GST separately when invoicing if your business is registered for GST.
Why is my billable hours estimate important?
Overestimating billable hours understates the rate you need to charge, since fixed costs and profit are spread across fewer real chargeable hours.
Results are estimates only and are not financial, tax, legal or credit advice.