Hourly Rate Calculator

How to calculate your freelance hourly rate in Australia

One of the most common mistakes freelancers and contractors make is basing their hourly rate on what they used to earn as an employee, divided by 40 hours a week. This ignores the reality that as a sole trader or contractor, you are responsible for your own superannuation (12% from 1 July 2025), income tax, business expenses, annual leave, sick leave, and the significant portion of your week spent on non-billable work.

A typical freelancer can realistically bill 6 hours per day - the remaining time goes to admin, marketing, quoting, invoicing, and professional development. After factoring in 4 weeks of annual leave, 10 sick days, and 8 public holidays, the actual billable hours in a year are significantly lower than the 2,080 hours (40 x 52) that salaried employees often assume.

How to use this hourly rate calculator

1. Enter your desired annual take-home income (the amount you want in your bank account after tax).
2. Add your estimated annual business expenses such as software, insurance, equipment, and vehicle costs.
3. Set your billable hours per day and working days per week to reflect your realistic schedule.
4. Adjust leave weeks to account for annual leave, sick days, and public holidays you will not bill for.
5. Review the calculated minimum hourly rate, which includes provisions for tax and superannuation.

Australian contractor rates and market context

Hourly rates for Australian contractors vary widely by industry and skill level. Trades and construction contractors typically charge $60-$120 per hour, IT consultants $100-$250, bookkeepers and BAS agents $60-$100, and marketing consultants $80-$180. These rates reflect the full cost of operating as a sole trader or company, including GST (which is not your income), super provisions, insurance, and the overhead of running a business. If your calculated minimum rate falls well below market rates for your industry, you likely have room to charge more. If it falls above, review your expense assumptions or consider ways to increase your billable utilisation.

How AP automation helps freelancers and contractors

Time spent processing supplier invoices, chasing receipts, and reconciling accounts is time you cannot bill. Automating accounts payable means invoices are captured, coded, and synced to your accounting software without manual data entry - freeing up more of your day for billable work and directly improving your effective hourly earnings.