Australian self-employment pricing tool
Sole Trader Hourly Rate Calculator Australia
Calculate a sustainable hourly rate from desired income, business expenses, billable hours, tax, super and contingency buffers.
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How the rate is built
The calculator first estimates realistic annual billable hours after removing non-billable time and unpaid weeks. It grosses up the desired personal income using the tax buffer, adds a separate super buffer and annual business expenses, then adds the selected contingency or profit buffer.
The resulting annual revenue target is divided by billable hours. GST is shown separately because GST collected from a client is generally not revenue available to keep.
Billable hours = working weeks × weekly hours × (1 − non-billable percentage).
Minimum ex-GST hourly rate = annual revenue target ÷ annual billable hours.
How to set realistic inputs
Do not set non-billable time to zero. Quoting, bookkeeping, marketing, client communication, travel, training and gaps between jobs consume real hours. New service businesses often have a higher non-billable percentage than established businesses with recurring clients.
Include software, insurance, registrations, equipment replacement, professional fees, phone, internet, vehicle costs and unpaid leave in annual expenses or buffers. Then compare the calculated minimum with what the market will pay. If the gap is too large, the answer may be a different service model, minimum booking, package price or target customer—not simply charging an unsustainable rate.
Tax and business limitations
The tax buffer is not an income-tax calculation. Actual tax depends on taxable profit, deductions, other income, offsets and business structure. The calculator does not model company tax, payroll tax, workers compensation, employee costs or industry-specific compliance.
Use it to pressure-test pricing before speaking with an accountant or bookkeeper, not as a substitute for professional advice.
Official sources and assumptions
Worked hourly-rate scenarios
Tradie or field service
A contractor may work 40 hours a week but bill only 24 after travel, quoting, ordering materials, invoicing and unpaid follow-up. Pricing from 40 billable hours understates the rate required to fund the same annual income.
Freelancer with project work
Project-based work still needs an internal hourly rate. Estimate the delivery hours, revision time, sales time and administration. A fixed quote should include a contingency rather than assuming every project runs exactly to plan.
GST and client-facing rates
When GST registered, keep the ex-GST rate as the business revenue figure and show the GST-inclusive amount on the client invoice. GST collected is not additional income available for tax, super or personal drawings.
Inputs that most often fail
- Using all working hours as billable hours.
- Forgetting annual leave, public holidays, illness and quiet weeks.
- Using a tax percentage as though it were a final tax calculation.
- Setting super aside only after personal spending.
- Ignoring software, insurance, tools, licences, vehicle costs and bad debt.
Frequently asked questions
Why is the rate higher than an employee hourly rate?
A sole trader must fund unpaid leave, non-billable time, business expenses, tax planning, super and business risk from the client rate.
Is the tax buffer calculated from ATO brackets?
No. It is a user-controlled reserve percentage because the appropriate amount depends on profit and personal circumstances.
Should GST be added on top?
When registered and the service is taxable, GST is normally added to the ex-GST rate. Confirm registration and tax treatment with the ATO or an adviser.
What should I use for non-billable time?
Use actual time records where possible. A cautious starting estimate is often more useful than assuming nearly every working hour can be invoiced.
Turn the rate into a quote or invoice
Once you have tested a sustainable hourly rate, use the free Invoice Manager to prepare a quote, save the customer and issue the final invoice.