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How much should a tradie charge per hour?

By Luke Tadich · The Tradie Owner

Ask ten tradies what they charge and you'll get ten confident answers. Ask them how they worked it out and most go quiet. The number usually came from what the last boss charged or what mates reckon is fair. That's not pricing, that's guessing, and it's the most expensive habit in the trades.

The number you charge is not the number you keep

Before you make a cent of profit, an hour of your time has to cover a lot more than the wage:

• Wages and on-costs: super, leave, workcover, payroll tax
• Insurance: public liability, tools, income protection
• Vehicle: payments, fuel, rego, servicing, wear
• Tools and equipment: buying, repairing, replacing
• Overheads: phone, software, accounting, marketing
• Downtime: travel, weather, chasing materials, unpaid callbacks

Billable hours are the trap

You might work an eight-hour day, but you don't bill eight hours. Between travel, quoting, admin and callbacks, plenty of owners bill five or six. Price as if you bill eight and you're covering costs for hours that never earn a dollar.

How to calculate your true cost per hour

1. Add up your total annual costs to keep the doors open.
2. Work out your real billable hours a year, honestly.
3. Divide costs by billable hours: that's your break-even rate.
4. Add a profit margin on top. That's your minimum charge-out rate.

So what should you actually charge?

Your true cost per billable hour plus a healthy margin, and stop apologising for it. You're too expensive is usually wrong: most tradies aren't too dear, they're too cheap and don't know their numbers. The right customers don't blink at a fair price.