Free Hourly Rate Calculator for Australian Freelancers

The Framework

Your hourly rate needs to cover four things:

1. Your desired take-home income (what you want to actually earn)

2. Business expenses (all the costs of operating)

3. Statutory loadings (superannuation, insurance, on-costs)

4. GST (if registered - added on top for client-facing rate)

Core Formula:

Step 1: Weekly Income Target = Annual Income ÷ Working Weeks

Step 2: Weekly Expenses = Annual Expenses ÷ Working Weeks

Step 3: Weekly Subtotal = Weekly Income + Weekly Expenses

Step 4: Weekly Loadings = Weekly Subtotal × (Super% + Insurance%)

Step 5: Weekly Total = Weekly Subtotal + Weekly Loadings

Step 6: Hourly Rate (ex GST) = Weekly Total ÷ Hours Per Week

Step 7: Hourly Rate (inc GST) = Hourly Rate × 1.1 (if GST registered)

This is the exact methodology used in our calculator above.

Step 1: Define Your Desired Annual Income

What do you want to take home personally (before personal tax)?

Consider:

• Living expenses (rent, food, utilities, transport)

• Personal savings goals

• Debt repayment

• Lifestyle choices (travel, hobbies, entertainment)

• Family obligations

Example: $90,000/year take-home

This is YOUR income, not business revenue. Revenue needs to be much higher to deliver this income after business costs.

Step 2: Calculate Business Expenses

Fixed Annual Costs:

Your expenses will vary, but $20,000-40,000 is typical for Australian freelancers.

Step 3: Estimate Tax Obligations

Income Tax:

Australia’s tax brackets (2024-25):

• $0-$18,200: 0%

• $18,201-$45,000: 19%

• $45,001-$120,000: 32.5%

• $120,001-$180,000: 37%

• $180,001+: 45%

Medicare Levy: 2% of taxable income

Example:

If your business generates $150,000 revenue:

• Income after expenses: $121,000

• Income tax: ~$31,000

• Medicare levy: ~$2,400

• Total tax: ~$33,400

Note: You’ll also collect GST if registered, but this is passed to ATO (not your cost). However, GST registration affects your pricing structure.

Step 4: Calculate Billable Hours

Be realistic about how many hours you’ll actually bill:

Total Hours Available:

• 52 weeks/year × 40 hours = 2,080 hours

Subtract Non-Billable Time:

• Annual leave: 4 weeks = 160 hours

• Public holidays: 10 days = 80 hours

• Sick days: 1-2 weeks = 40-80 hours

• Professional development: 2 weeks = 80 hours

• Admin and business development: 10 hrs/week = 520 hours

• Proposal and quotes (unbilled): 3 hrs/week = 156 hours

Realistic Billable Hours: 1,000-1,200 hours per year

Example: 1,100 billable hours/year = 21 hours per week average

This accounts for real-world realities: client gaps, unpaid work, time off.

Step 5: Apply the Formula

Example Calculation:

Using the weekly calculation method (matching our calculator):

Annual income goal: $90,000

Annual expenses: $29,000

Working weeks: 48 (52 - 4 vacation)

Hours per week: 30

Super loading: 11%

Insurance loading: 3%

GST registered: Yes

  

Step 1: Weekly income target = $90,000 ÷ 48 = $1,875

Step 2: Weekly expenses = $29,000 ÷ 48 = $604

Step 3: Weekly subtotal = $1,875 + $604 = $2,479

Step 4: Weekly loadings = $2,479 × 14% = $347

Step 5: Weekly total = $2,479 + $347 = $2,826

Step 6: Hourly rate (ex GST) = $2,826 ÷ 30 = $94.20

Step 7: Hourly rate (inc GST) = $94.20 × 1.1 = $103.62

Round to: $105/hour (inc GST) or $95/hour (ex GST)

This is your MINIMUM rate to achieve your income goal sustainably. Note that taxes are paid on your personal income, not built into your hourly rate calculation.

Australian Business Cost Considerations

Subject: 2025 Rate Update

Hi [Name],

I wanted to give you advance notice that I'll be adjusting my rates effective [date, at least 30 days out].

My new rate will be [new rate], up from [old rate].

This increase reflects:

- [Reason 1: inflation, increased expertise, additional services]

- [Reason 2: market positioning, demand, specialization]

I truly value our working relationship and wanted to give you plenty of notice.

If you have any questions or concerns, I'm happy to discuss.

Thanks for your continued partnership.

Best,

[Your name]