Charge at least
$124
per billable hour, excluding GST
- Revenue needed
- $125,333
- Billable hours a year
- 1,012
- Day rate (8 hrs)
- $991
Why your rate is not your salary divided by 2,000
A full-time employee is paid for roughly 38 hours a week, 52 weeks a year. A sole trader is not. You do not bill the hours you spend quoting, invoicing, chasing payment, doing your books or looking for the next job — and you are not paid at all when you take leave or get sick.
This calculator does the arithmetic that catches people out: it takes the income you want to end up with, adds the business costs you have to cover and the tax you will owe, and divides by the hours you can realistically bill rather than the hours you will work.
What the numbers mean
- Target take-home. What you want left after business expenses and income tax — the figure that reaches your personal account.
- Business costs. Everything you pay to operate for a year: insurance, tools, software, vehicle, phone, accountant.
- Billable hours a week. Be honest. For most solo operators this is 20–25, not 38 — the rest goes on running the business.
- Weeks off. Annual leave, public holidays and the weeks you are sick. Nobody pays these for you.
- Tax rate. A rough average rate across your income, not your top marginal rate. Australian rates are progressive, so your average is lower than your marginal — check your bracket on ato.gov.au.
The result excludes GST. If you are registered, you add 10% on top when you invoice — that money is the ATO's, not yours, and our GST calculator will do that step.
This is a planning estimate, not tax advice. Your actual tax depends on your total income, deductions and circumstances — talk to a registered tax agent before you rely on a number.
Frequently asked questions
Most solo operators bill 20 to 25 hours in a 38-hour week. The rest goes on quoting, invoicing, chasing payment, admin, marketing and travel. Setting a rate against 38 billable hours is the single most common reason a sole trader ends up underpaid.
Australian income tax is progressive, so your average rate is well below your top marginal rate. Rather than guess, look up the current brackets on ato.gov.au and work out the tax on your expected income, then divide by that income. Remember to allow for the Medicare levy.
If you are registered for GST, yes — add 10% on top when you invoice. It is not income; you collect it for the ATO and remit it on your BAS. If you are not registered, do not add it.
Sole traders are not required to pay themselves super, but most should. If you want to contribute, treat it as one of your business costs and add the annual amount to the costs field so the rate covers it.