Charge-out rate model

If I want to pay myself well, what do I need to charge per hour?

Adjust your wages, working hours and costs to see what each billable hour needs to bring in, and the workload behind that number.

Business type: Service

Your assumptions

Your numbers

Choose a business type to load example numbers, then adjust them to suit your business.

not including you
2
per person, per year
$80,000
what you pay yourself for your work
$150,000
per person
38 hrs
share of hours you can bill
75 %
52 wks

Where each sales dollar goes

These percentages are shares of required sales. People includes staff and owner wages plus a 12% super allowance.

Customer Margin20%
Profit margin10%

AUD excluding GST. People includes wages and a 12% super allowance. Return is pre-tax profit after wages and super.

What the model says

Your hourly target

Charge-out rate per hour

$130.15 / hr

This is your pricing job: what every billable hour needs to bring in to pay everyone, including you.

Sales per person of $192,889 ÷ 1,482 billable hours.

Billable hours per person, per year

1,482 hrs

This is your operational job: can you and your team actually bill that many hours, every year?

38 hrs × 52 weeks × 75% charged. About 28.5 billable hours a week each.

How that rate is made up

Required sales (all wages + super) ÷ People %$578,667
Sales per person required sales ÷ 3 people$192,889
Staff cost wages + 12% super$179,200
Your wage for your work, + 12% super$168,000
Your return profit on the business, after your wage$57,867

Your wage and your return are shown separately on purpose. Your wage pays you for the work you do, like an employee. Your return is what the business earns you as its owner. Blending the two hides whether the business can actually afford you.

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