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Ever looked at what you pay someone per hour and thought, “Sweet, I’ll just charge that out… maybe with a bit extra”? If you have, you’re in good company.
Most tradies don’t undercharge because they’re bad at business. They undercharge because labour pricing is confusing, and it’s way too easy to miss the costs you don’t see on a weekly payslip.
The result is brutal: you can be flat out all month, the team’s busy, jobs are rolling through… and you’re still wondering why there’s not much left at the end.
That’s exactly why we built the NextMinute Labour Charge-Out Calculator for Aussie tradies. It helps you work out what you should be charging your team out at, based on real costs like leave, downtime, public holidays, and sick leave, so you can stop guessing and start pricing with confidence.
Why your hourly wage isn’t your real hourly cost
Let’s say you’ve got a tradie on $40 an hour. Easy, right?
Not quite. Because the business doesn’t just pay $40 and get 60 minutes of billable work, every hour, all year.
In the real world, you’ve got things like annual leave, sick days, public holidays, training time, travel time, wet weather (depending on the trade), gaps between jobs, and the general “stuff happens” of running a crew. Even the best-run schedule has downtime.
Then there are the on-costs that sit on top of wages. Super is the obvious one, but depending on your setup there can be other costs that add up as you grow.
So if you charge out labour based only on the wage, you’re pricing your work like your team is billable 100% of the time. Most businesses aren’t, and that’s where profit quietly disappears.
The trap tradies fall into (and it’s not your fault)
Here’s the common pattern:
You want to be fair, competitive, and win work. You hear what others charge and aim around there. You feel awkward charging “too much” per hour. So you set a rate that sounds reasonable.
But “reasonable” doesn’t always equal “profitable”.
If your charge-out rate doesn’t cover the true cost of employing someone and leave room for overhead and profit, the business ends up wearing the difference. You might not feel it on one job, but over a year it shows up as cashflow stress, not being able to hire, or needing to work weekends just to catch up.
What a proper charge-out rate should cover
A healthy charge-out rate isn’t just about covering wages. It needs to cover:
The cost of employing the person, including paid time they’re not on the tools (leave, public holidays, sick leave). It also needs to account for the hours that aren’t billable, like travel, gaps between jobs, and admin that happens on site.
And then there’s the business side. The vehicles, tools, insurance, fuel, phones, software, rent, and everything else that keeps the doors open.
Finally, it has to include profit. Not “whatever’s left if we get lucky”. Actual planned profit. That’s what allows you to grow, invest in better gear, pay the team properly, and not feel like one slow month will knock you over.
Introducing the NextMinute Labour Calculator
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We built the NextMinute Labour Calculator to help tradies get to the right number faster, without needing a spreadsheet obsession or an accounting degree.
It’s designed to help you work out a realistic labour charge-out rate by factoring in the stuff that usually gets missed, like:
Paid leave and public holidays, sick leave, and non-billable time such as downtime between jobs.
The point isn’t to “charge more just because”. The point is to charge properly, so your hourly rate actually covers the real cost of running a team.
What you get when you stop guessing
When your labour rates are right, everything downstream gets easier.
Quoting becomes faster because you’re not second-guessing. Your pricing gets more consistent across jobs and across the team. You’re less likely to win work that looks good on paper but loses money in reality. And you can make decisions with a clearer head, like when to hire, when to raise rates, or which types of jobs are actually worth chasing.
It also takes the pressure off materials pricing. A lot of tradies unknowingly rely on materials markup to “make up” for undercharged labour. When labour is priced correctly, your margins are more stable and your business is less exposed when material prices change.
How to use the calculator (in real tradie terms)
The best way to use a charge-out calculator is as a reality check. You punch in the core details about your team member and your working year, including the time they’re paid for but not billing. The calculator gives you a recommended charge-out rate that reflects the true cost per productive hour.
From there, you’ve got a proper baseline. You can adjust based on skill level, the type of work you do, and where you want your profit to land, but you’re making decisions based on numbers, not gut feel.
Even if you already have a rate in mind, it’s worth doing. Plenty of tradies are surprised by how far off the “wage plus a bit” approach can be once you account for downtime and leave.
Make quoting easier with NextMinute
Getting the right rate is step one. Step two is making sure you actually use it on every quote, even when you’re busy.
NextMinute helps tradies quote right by turning your pricing into a repeatable process. You can build quotes that clearly include labour, materials, and any allowances you need, so nothing gets missed. And if you’re working with supplier pricing, you can import supplier price books, apply your markup or margin rules, and save templates for common jobs so you’re not rebuilding the same quote from scratch every time.
That means fewer underquoted jobs, less admin at night, and more confidence that what you’re charging will actually make you money.
The bottom line
If you’re paying someone $X per hour, that’s not automatically what it costs your business per billable hour. Leave, sick days, public holidays, and downtime are all real costs, and if they’re not in your pricing, they come out of your profit.
The NextMinute Labour Calculator is built to make this simple. Run the numbers, get a realistic charge-out rate, and start quoting with confidence.
