How to Set Your Hourly Rate as a Tradie in 2026 (State-by-State Guide)
Most tradies set their hourly rate by looking at what their mates charge, adding a few dollars, and hoping for the best. The result? A rate that covers costs on a good week but leaves nothing for profit, super, or the weeks when you are quoting, driving, or waiting for materials.
Setting your hourly rate properly is the difference between a trade business that makes you a good living and one that keeps you on a treadmill. This guide walks you through the calculation step by step, then shows you what others in your trade are charging across Australia in 2026.
The Rate Calculation Formula
Your charge-out rate needs to cover four things: your costs, your desired salary, your superannuation, and your profit margin. Here is the formula.
Charge-out rate = (Annual Costs + Desired Salary + Super) / Billable Hours per Year / (1 - Profit Margin %)
Let us break that down.
Step 1: Calculate Your Annual Business Costs
These are the costs of running your business — the expenses that exist whether you are on a job or not.
| Cost Category | Typical Range (Annual) |
|---|---|
| Vehicle (lease, fuel, rego, insurance, maintenance) | $12,000 – $25,000 |
| Tools and equipment (purchase, repair, replacement) | $3,000 – $10,000 |
| Insurance (public liability, income protection, tools) | $3,000 – $8,000 |
| Licence fees and CPD (continuing professional development) | $500 – $2,000 |
| Phone, internet, software, subscriptions | $2,000 – $5,000 |
| Accounting and bookkeeping | $2,000 – $5,000 |
| Marketing (website, Google ads, signage) | $1,000 – $5,000 |
| Uniform, PPE, safety equipment | $500 – $2,000 |
| Office / storage / workshop rent (if applicable) | $0 – $15,000 |
| Miscellaneous (bank fees, subscriptions, stationery) | $1,000 – $3,000 |
Typical total for a sole trader tradie: $25,000 – $70,000 per year, depending on the trade and overheads.
Step 2: Set Your Desired Salary
This is what you want to take home before tax. Be honest and realistic. What do you need to live on, and what do you want to earn?
| Experience Level | Typical Salary Target |
|---|---|
| First year out on your own | $70,000 – $90,000 |
| Established (3–5 years) | $90,000 – $120,000 |
| Experienced specialist | $120,000 – $160,000 |
| High-demand trade / metro area | $140,000 – $200,000+ |
Step 3: Add Superannuation
As a sole trader, you are not required to pay yourself super (though you should). If you want to pay yourself the standard 11.5% super guarantee rate in 2026, add that on top of your salary.
On a $100,000 salary: $11,500 in super contributions.
Step 4: Calculate Your Billable Hours
This is where most tradies get it wrong. You do not have 2,080 billable hours per year (52 weeks x 40 hours). You have significantly less.
| Item | Hours |
|---|---|
| Total working hours (48 weeks x 45 hours) | 2,160 |
| Less: Annual leave (4 weeks x 45 hours) | -180 |
| Less: Public holidays (8 days x 9 hours) | -72 |
| Less: Sick days (5 days x 9 hours) | -45 |
| Less: Admin, quoting, invoicing (20% of working time) | -373 |
| Less: Travel between jobs (10% of working time) | -186 |
| Net billable hours | ~1,300 |
For most sole trader tradies, realistic billable hours are between 1,100 and 1,400 per year. Using 1,300 is a reasonable middle ground. If you are spending more than 20% of your time on admin, that number drops further.
Step 5: Put It Together
Example calculation for an established plumber in Melbourne:
| Component | Amount |
|---|---|
| Annual business costs | $45,000 |
| Desired salary | $110,000 |
| Superannuation (11.5%) | $12,650 |
| Total to cover | $167,650 |
| Billable hours | 1,300 |
| Base hourly rate | $129/hr |
| Add 15% profit margin | $152/hr |
| Charge-out rate (ex. GST) | $152/hr |
| Charge-out rate (inc. GST) | $167/hr |
That $167/hr might sound high compared to what some tradies charge. But it is the rate required to pay yourself $110,000, fund your super, cover your costs, and have a 15% profit margin in the business. Charge less, and something has to give — usually your take-home pay.
Tip: The profit margin is not your salary. It is the buffer that keeps your business alive when a customer does not pay, when your van needs a new engine, or when you have a quiet month. A 10–20% profit margin is the minimum for a sustainable trade business. Without it, one bad month can wipe you out.
Average Tradie Hourly Rates by Trade (2026)
These are typical charge-out rates across Australian metro areas in 2026, including GST. Regional rates may be 10–20% higher due to travel. Rates are based on industry surveys, job platform data, and ABS labour statistics.
| Trade | Hourly Rate (inc. GST) | Callout/Min Charge |
|---|---|---|
| Electrician | $80 – $130/hr | $80 – $150 |
| Plumber | $80 – $130/hr | $80 – $130 |
| HVAC technician | $90 – $140/hr | $80 – $130 |
| Builder (general) | $70 – $120/hr | Usually project-based |
| Carpenter | $65 – $110/hr | $70 – $120 |
| Painter | $50 – $85/hr | Usually project-based |
| Roofer | $70 – $120/hr | $100 – $200 |
| Tiler | $60 – $100/hr | Usually project-based |
| Landscaper | $55 – $95/hr | $60 – $100 |
| Concreter | $65 – $110/hr | Usually project-based |
Hourly Rates by State
Rates vary significantly between states, driven by demand, cost of living, and competition.
| Trade | NSW/Sydney | VIC/Melbourne | QLD/Brisbane | WA/Perth | SA/Adelaide |
|---|---|---|---|---|---|
| Electrician | $100 – $140 | $90 – $130 | $85 – $120 | $95 – $135 | $80 – $115 |
| Plumber | $100 – $140 | $90 – $125 | $85 – $120 | $90 – $130 | $80 – $115 |
| HVAC | $100 – $150 | $95 – $140 | $90 – $130 | $95 – $140 | $85 – $125 |
| Builder | $80 – $130 | $75 – $120 | $70 – $110 | $75 – $125 | $65 – $105 |
| Carpenter | $75 – $120 | $70 – $110 | $65 – $105 | $70 – $115 | $60 – $100 |
| Painter | $55 – $90 | $50 – $85 | $50 – $80 | $55 – $85 | $45 – $75 |
Common Mistakes When Setting Rates
1. Charging What Your Mate Charges
Your mate may have lower overheads, a paid-off van, or be undercharging himself. His rate is not your rate. Calculate yours based on your actual costs and goals.
2. Forgetting Non-Billable Time
If you charge $100/hr and work 8 hours on a job, you bill $800. But you also spent 30 minutes quoting, 45 minutes driving, and 30 minutes invoicing. Your effective rate is $800 / 9.75 hours = $82/hr. Factor in the non-billable time.
3. Not Accounting for GST
Your charge-out rate is ex-GST. What the customer pays is inc-GST. When you quote "$100/hr," make sure you know which one you mean. If $100 is your inc-GST rate, your actual revenue is only $90.91/hr.
4. Competing on Price
The cheapest tradie is rarely the busiest. Customers who choose based on price alone are the most likely to complain, haggle, and pay late. Competing on price is a race to the bottom. Compete on speed, reliability, communication, and quality instead.
5. Not Reviewing Annually
Costs go up every year. Insurance premiums, fuel, materials, and the cost of living all increase. If you set your rate three years ago and have not increased it, you are effectively taking a pay cut every year.
Tip: Increase your rate by at least 3–5% every year to keep pace with inflation and rising costs. Most customers will not notice or complain about a small annual increase. The ones who do are usually the ones you would rather not work for anyway.
Hourly Rate vs Fixed Pricing
Many tradies use hourly rates for time-and-materials work but fixed pricing for common jobs. Both have a place.
| Pricing Method | Best For | Risk |
|---|---|---|
| Hourly rate | Unknown scope, diagnostic work, small repairs | Customer uncertainty; "watching the clock" anxiety |
| Fixed price | Defined scope, repeatable jobs (tap replacement, powerpoint install) | You absorb the risk if the job takes longer |
| Hybrid (fixed quote with hourly for variations) | Renovations, larger projects | Requires clear scope and variation process |
Fixed pricing often works better for your business because you are incentivised to work efficiently. If you quote $350 for a job and do it in 2 hours, your effective rate is $175/hr. If it takes 3 hours, it drops to $117/hr. Over time, as you get faster at common jobs, fixed pricing rewards your experience.
What Gross Margins Should You Target?
According to industry benchmarks for Australian trade businesses, the average gross margin (revenue minus direct job costs) is 35–45% for residential work and 20–30% for commercial work.
| Margin Level | What It Means |
|---|---|
| Under 25% | Danger zone — barely covering overheads |
| 25% – 35% | Surviving but not thriving |
| 35% – 45% | Healthy trade business |
| 45% – 55% | Strong business, well-managed pricing |
| Over 55% | Exceptional — usually specialist or high-demand trade |
If your gross margins are under 30%, your rates are too low, your costs are too high, or both. Run the calculation in Step 1–5 above and adjust.
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Your Rate-Setting Checklist
- Calculated all annual business costs
- Set a realistic salary target (not just "whatever's left")
- Factored in superannuation (11.5%)
- Calculated realistic billable hours (1,100 – 1,400, not 2,080)
- Added a profit margin (10–20% minimum)
- Checked your rate against state averages for your trade
- Set a calendar reminder to review rates annually
- Created fixed prices for your most common jobs
- Ensured all quotes and invoices clearly state whether prices are inc. or ex. GST
Your hourly rate is not just a number — it is the foundation of your business's financial health. Get it right, and everything else becomes easier. Get it wrong, and you will work hard, stay busy, and wonder why there is never any money left at the end of the month.
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