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Charge-out rate calculator

Work out an hourly rate that pays you a proper wage, covers the van, the tools and the admin, and still works in a quiet month.

Charge-out rate

Before tax.

Van, tools, insurance, ACC, software…

Holidays, stat days, sick.

Time you can actually charge.

For quiet months and growth.

Break-even
$72.46/hr
Charge (excl. GST)
$79.71/hr
Charge (incl. GST)
$91.67/hr

1,449 billable hours a year cover $105,000 of wage and costs.

The short answerTo set an hourly charge-out rate, add the wage you want to a year of business costs, then divide by the hours you can actually bill. Most owners can't bill every hour they work: travel, quoting, invoicing and quiet weeks eat into it. Add a profit buffer on top, then 15% GST if you're registered.

How do I work out my charge-out rate?

  1. Pick a wage. What you'd need to earn as an employee doing the same job, before tax.
  2. Add up a year of business costs. Everything you wouldn't pay as an employee.
  3. Count your billable hours. Hours a week × weeks you actually work × the share you can charge for.
  4. Divide. (Wage + costs) ÷ billable hours is your break-even rate.
  5. Add a buffer for profit, quiet months and replacing gear, then GST if you're registered.

Why do billable hours matter so much?

They're the biggest lever. With an $80,000 wage, $25,000 of costs, 45 hours a week, 6 weeks off and a 10% buffer:

Billable shareBillable hoursRate (excl. GST)
60%1,242$93.00
70%1,449$79.71
80%1,656$69.75

Dropping from 70% to 60% billable needs an extra $13 an hour just to stand still. Track your unbilled time for a month before you pick a number.

What goes in business costs?

  • Vehicle: lease or loan, fuel, servicing, registration and road user charges
  • Tools and equipment, including wear and replacement
  • Insurance: public liability, professional indemnity, tools and vehicle
  • ACC levies for the self-employed (ACC invoices these)
  • Phone, software, website and subscriptions
  • Accountant, bank fees and licences or registrations
  • Marketing, training and protective gear

Leave income tax out of costs. It comes out of your wage. For pricing whole jobs rather than hours, see business.govt.nz's guide below and our margin calculator.

Questions owners ask

How do I calculate my hourly rate as a sole trader in NZ?

Add the yearly wage you want to your yearly business costs, then divide by your billable hours: hours a week × weeks worked × the share of time you can charge. Then add a profit buffer, and GST if you're registered. The calculator above does each step.

What's a typical charge-out rate in New Zealand?

It varies a lot by trade, region and experience, so check what similar businesses near you charge. Use the market rate as a sense check, not as your starting point. If the market rate is below your break-even rate, change your costs, your hours or your offer before you match it.

Should my charge-out rate include GST?

If you're GST-registered, you must charge 15% GST on top, and your quotes should say clearly whether prices are plus GST or GST-inclusive. Work out your rate before GST, because the GST belongs to Inland Revenue. If you're not registered, don't add GST.

What counts as billable time?

Time a client pays for: on-site work, or design or consulting hours on the invoice. Non-billable time is everything else that keeps the business running, such as travel (unless you charge for it), quoting, ordering, admin, invoicing and marketing. For many trades and freelancers it's 25% to 40% of the week.

How often should I review my rate?

At least once a year, and whenever your costs jump: fuel, insurance, ACC levies or a new van. Small yearly increases are easier for clients to accept than one big rise after years of standing still.

General information, not financial advice. The rate covers the wage and costs you enter. Your accountant can help you check both.

Where's this from?

Checked against these sources on 7 November 2026 by MySMB Editorial. Spotted a mistake? Tell us and we'll fix it.

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