Charge out rate calculator built on your real running costs
Most tradies set their hourly rate by checking what the bloke down the road charges. TradieTally works it out from what your business actually costs to run, then sets a rate that hits the margin you need.
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Charge $218.91/hr to make $109.45/hr profit at a 50% margin.
TradieTally includes a charge-out rate calculator that builds your hourly running cost from real business expenses, billable hours, lost days and employer on-costs, then sets a charge rate from a target gross margin. It also compares margin against markup so you can see the profit difference per hour.
How do you calculate a charge out rate?
A charge out rate is your hourly running cost plus the profit you want, worked out on margin. The steps are the same for any trade: add up what it costs to run the business, divide by the hours you can actually bill, then price to a target gross margin.
TradieTally walks you through it in that order.
- Running costs: vehicle and fuel, tools, insurance, materials, office and admin
- Billable hours, less lost days for weather, sickness, holidays and admin
- Employer on-costs: super, workers comp and leave loading
- Target gross margin turned into an hourly charge rate
Why do billable hours and lost days change the rate so much?
You pay for the ute, insurance and phone every day of the year, but you only bill on days you are on the tools. Rain days, public holidays, sick days, quoting time and chasing invoices all reduce billable hours, and every hour lost pushes the cost of the remaining hours up.
TradieTally tracks lost days so your hourly cost reflects the hours you actually sell, not a 52-week, 38-hour fantasy. For staff, the employer on-costs for super, workers comp and leave loading are added on top of wages.
What is the difference between margin and markup on a charge rate?
Markup is profit as a percentage of cost. Margin is profit as a percentage of the price. A 50% markup on a $100 cost gives a $150 price, which is only a 33% margin. Pricing on margin means the profit percentage you set is the one you actually get.
Example from the app: a running cost of $109.45/hr at a 50% gross margin gives a charge rate of $218.91/hr. The built-in margin vs markup comparison shows $76.62 more profit every hour by pricing on margin instead of markup. Our article on markup vs margin for tradies goes deeper.
How does the charge rate flow into quotes and estimates?
Once the rate is set, it is used on the labour lines in your estimating software and quotes. Productivity rates per hour, per m² or per km let you price the way each trade works, such as metres of cable for a sparky or hours per head for an A/C install.
If a quote’s costs push the margin below your target, TradieTally shows a margin warning before you send it.
Do electricians, security techs and A/C businesses need different rates?
The method is the same, but the inputs differ. An electrician carries test equipment and licence costs, a security technician often has longer programming and commissioning time on CCTV and access control jobs, and an air conditioning business has vacuum pumps, gauges, recovery gear and two-person installs that change the labour cost per job.
Because TradieTally builds the rate from your own figures, each business gets a rate that fits how it works. Curious how much time quoting itself is costing you? Try the quoting-time calculator.
Charge-out rate for your trade
Electrical estimating software
Switchboard upgrades, rewires, EV chargers and fit-outs priced from your real labour and material costs.
- LED downlight changeover
- Switchboard upgrade
- Double GPO add
Security installer quoting software
Quote CCTV, alarms, intercoms and access control on site, then manage installs and service visits.
- 4-camera CCTV install
- Alarm install
- Intercom install
Air conditioning quoting software
Split, ducted and multi-head installs plus service agreements, with true profit on every job.
- Split system back-to-back install
- Split system standard install
- Ducted zone add
Charge-out rate FAQs
What costs should go into a tradie’s hourly running cost?
Include vehicle and fuel, tools, insurance, materials and office or admin costs, plus employer on-costs like super, workers comp and leave loading for staff. TradieTally adds these up and divides by your real billable hours to get an hourly running cost.
How many billable hours should I assume in a year?
Start from your working weeks and hours, then subtract lost days for public holidays, leave, sickness, weather and admin time. TradieTally tracks lost days so the hourly cost is based on hours you can actually bill rather than every hour you are at work.
What charge rate do I need to make a 50% gross margin?
Divide your hourly running cost by one minus the margin. In the example from the app, a $109.45/hr running cost at 50% gross margin gives a charge rate of $218.91/hr. TradieTally does this calculation for you once your costs are entered.
Will my field staff see my charge-out rate?
No, not unless you choose to show them. Profit, margins, running costs, revenue and charge-out rates are hidden from field users by default and can only be granted by you.
Stop quoting at the kitchen table.
Price every job from your real costs, see the profit before you hit send, and run the whole job from one app. Built by a sparky for electricians, security techs and A/C contractors.