How to Price Your Work as a Tradie in Australia (And Actually Make Money)

Underpricing is one of the most common and damaging mistakes Australian tradies make. You work hard, stay busy, win plenty of jobs — and still struggle to get ahead financially. The culprit is almost always a rate that doesn't account for the real cost of running a trade business.

This guide walks through exactly how to calculate what you need to charge, what most tradies forget to include, and how to set prices that are competitive without leaving money on the table.

Why Most Tradies Underprice Their Work

When tradies set their hourly rate, the most common approach is: "What was I earning as an employee? I'll charge a bit more than that."

The problem is that as an employee, your employer was covering costs you never saw: superannuation, workers compensation, public liability insurance, annual leave, sick leave, public holidays, tools, vehicle, quiet periods, and the time spent on quotes that don't win. When you go out on your own, all of those costs fall on you — and they're substantial.

A tradie charging $65/hour when they should be charging $95/hour is effectively subsidising their clients. They stay busy, but they don't get ahead.

The Formula: Working Backwards from What You Need

The right way to set your rate is to work backwards from what you need to earn, not forwards from what someone else charges.

Step 1: Calculate Your Annual Personal Target

Start with what you need to take home — after tax — to cover your personal living costs, savings goals, and mortgage or rent. Be honest about this number.

Example: $80,000 per year after tax.

To earn $80,000 after tax as a sole trader in Australia (including Medicare Levy), you need approximately $110,000–$115,000 in taxable income at 2025–26 rates.

Step 2: Calculate Your Annual Business Costs

Add up every cost of running your trade business. Most tradies dramatically underestimate this.

Fixed costs (same regardless of how much work you do):

• Vehicle: registration, insurance, loan repayments — $8,000–$15,000/year
• Public liability insurance — $1,500–$4,000/year
• Tools insurance — $600–$1,500/year
• Income protection insurance — $1,500–$3,000/year
• Phone and internet — $1,800–$3,000/year
• Accounting/bookkeeping — $2,000–$5,000/year
• Software (accounting, job management) — $1,000–$2,500/year
• Licence and registration fees — $300–$1,000/year
• Marketing (website, ads) — $500–$3,000/year

Variable costs (scale with how much work you do):

• Fuel — $5,000–$15,000/year depending on kilometres
• Tool replacement and maintenance — $2,000–$5,000/year
• Work clothing and PPE — $500–$2,000/year
• Training and upskilling — $500–$2,000/year

A realistic total for a sole trader tradie: $25,000–$55,000 per year in business costs, before paying yourself anything.

For this example, use $35,000.

Step 3: Add Superannuation

As a self-employed tradie, you should be paying super for yourself. The super guarantee rate is 11.5% of ordinary earnings — if you target $80,000 take-home, you should budget approximately $13,000–$15,000 per year in super contributions.

Add $14,000 to the total.

Step 4: Calculate Your Total Revenue Target

Total needed = Personal income (pre-tax) + Business costs + Super

= $112,500 + $35,000 + $14,000

= $161,500 per year

This is what your business needs to generate before anything goes to tax.

Step 5: Calculate Your Billable Hours

Here's where most tradies get it badly wrong. A year has 52 weeks × 40 hours = 2,080 potential working hours. But your actual billable hours are considerably less.

Subtract non-billable time:

• Annual leave (4 weeks): –160 hours
• Public holidays (approximately 10 days): –80 hours
• Sick days (allow 5–10 days): –40–80 hours
• Quotes that don't win (allow 3–5 hours/week): –150–250 hours
• Admin, invoicing, BAS, bookkeeping (2–3 hours/week): –100–150 hours
• Travel between jobs (varies widely): –100–300 hours
• Business development, training: –50–100 hours

Realistic billable hours: 1,100–1,400 per year for a sole operator. Many tradies who think they work 40-hour weeks are billing 25–28 hours of those.

For this example, use 1,250 billable hours.

Step 6: Calculate Your Minimum Hourly Rate

Minimum rate = Total revenue target ÷ Billable hours

= $161,500 ÷ 1,250

= $129.20 per hour

This is the minimum you need to charge to hit your targets. It's not a premium rate. It's the baseline to keep the business viable.

The Reality Check: What Are Others Charging?

Before you panic at that number, check what the market actually supports in your trade and location. Indicative 2025–26 rates for common trades in Australia:

These are broad ranges — metro vs regional, complexity of work, and your specific reputation all affect where you sit in the range. The point is: the minimum viable rate calculated above for a typical sole trader tradie almost always falls within market rates. Many tradies are charging below what the market would accept.

Labour Rate vs Day Rate vs Fixed Price

There's more than one way to charge, and the right approach depends on the job type.

Hourly Rate

Best for: reactive maintenance, emergency callouts, jobs where scope is genuinely unknown.

The risk is that some clients resist hourly rates because they don't know what the final bill will be. Managing this with a rough estimate upfront ("this will likely take 3–4 hours at $130/hour, so estimate $390–$520") reduces friction.

Day Rate

A fixed daily rate rather than an hourly rate. Easier to quote, client knows the daily cost, and you're not penalised for working efficiently. Common in some trades and on larger projects.

Fixed Price (Lump Sum)

Best for: defined scope jobs where you can accurately estimate the work required.

The risk falls on you if the job takes longer than expected. The upside is that clients often prefer the certainty, and if you're good at estimating, you can earn more per hour than a straight hourly rate.

The critical rule: never fix-price a job without a thorough scope. "Supply and install bathroom" can mean $4,000 or $40,000 depending on what's behind the walls. Scope clearly, exclude what isn't included, and build in a contingency for unknown conditions.

Cost-Plus

You charge for materials at cost (or cost plus a margin) plus your labour. Common in building and renovation work. Transparent but requires trust and good record-keeping.

Materials and Markup

Don't forget to mark up materials. Sourcing materials takes time and expertise. Industry standard markup on materials ranges from 15–25% depending on the trade and the relationship with suppliers. Some tradies apply different margins depending on the supplier — higher markup on items sourced urgently at full retail, lower on items sourced through trade accounts.

Materials markup also covers the cost of your time spent ordering, collecting, and managing materials — time that isn't directly billable.

Call-Out Fees

Many trades charge a call-out fee for attending a job, separate from the hourly rate for work performed. This covers the cost of travel, van, fuel, and the time it takes to get to site — and makes it economically viable to attend smaller jobs.

Common call-out fee ranges: $80–$150 (metro) for the first half hour, with the hourly rate applying after that.

Communicating your call-out fee clearly upfront (in your quoting process and on your website) reduces disputes and sets the right expectations with clients.

After-Hours and Emergency Rates

Emergency and after-hours work costs you more — it disrupts your personal time, may require additional insurance coverage, and creates risk of errors under pressure. Charging a premium for this work is appropriate and expected in most trades.

Common practice: 1.5× to 2× the standard rate for weekend, public holiday, or emergency callouts. State this clearly in your terms and conditions.

Quoting vs Estimating

A quote is a fixed-price offer — if accepted, you're committed to that price regardless of what happens. An estimate is an approximation, and the final price can vary.

Use the right word on your documents. A "quote" accepted by a client is a contract. An "estimate" gives you more flexibility if conditions change.

For complex or uncertain work, always qualify your price: "This quote is based on [specific assumptions]. If [condition], additional charges will apply at $X/hour."

Raising Your Prices

Many tradies who calculate their true minimum rate realise they've been undercharging — sometimes significantly. The question then is how to raise prices without losing all your clients.

For new clients: Update your rates immediately. New clients have no reference point for your old prices.

For existing clients: Give notice. "From [date], my rates will be $X. This reflects increased costs across the board." Most clients who value your work will accept a reasonable increase. Those who don't were probably not worth keeping at a price that doesn't sustain your business.

Raise incrementally if needed: A $20/hour increase is easier to absorb than a $40 jump. If you're significantly underpriced, consider a staged approach over 12–18 months.

Stop discounting: Every discount is a reduction in your effective rate. If you want to offer value, offer exceptional work, reliability, and clear communication — not a cheaper price.

Reviewing Your Rate Annually

Your costs change every year — fuel prices, insurance premiums, super rate changes, software costs. Your rate should be reviewed at least annually, ideally in May or June before the new financial year, so you can update quotes from 1 July with confidence.

A once-a-year calculation — how many billable hours did I actually do? What did it cost to run my business? Am I hitting my personal income target? — keeps you honest about whether your pricing is working.

The Underlying Truth

The tradies who price confidently and correctly are not the most expensive in their market. They're the ones who know their numbers, communicate their value clearly, and don't apologise for charging a professional rate.

Underpricing doesn't make you more competitive in any sustainable way. It makes you the tradie who's always busy, always exhausted, and never getting ahead. The maths doesn't lie — if you're charging less than your minimum viable rate, the business is slowly going backwards regardless of how full your schedule is.

Calculate your number. Charge it. And get on with building a business that actually works.

Tradie Money AU helps Australian tradies get on top of their finances. This article is general guidance only — your specific rate will depend on your trade, location, costs, and business goals.