How to Set Your Hourly Rate as a Freelancer in Australia (2026 Guide)

One of the hardest parts of going freelance in Australia is working out what to charge.

Charge too little and you’re effectively subsidising your clients. Charge too much and you lose work before you’ve even started. But most freelancers make the decision based on gut feel or what they think the market will bear — without ever running the actual numbers.

This guide walks through exactly how to calculate a sustainable hourly rate as an Australian freelancer in 2026, including how to account for GST, superannuation, tax, non-billable time, and leave.

If you want to skip straight to the numbers, use the free hourly rate calculator.

Why most freelancers undercharge

Before getting into the formula, it helps to understand the most common mistake.

Most freelancers look at their previous salary and divide by 2,080 (52 weeks × 40 hours) to get an “equivalent” hourly rate. Then they add a bit for the uncertainty of freelancing and call it done.

The problem: that calculation ignores almost everything that makes freelancing different from employment.

When you’re employed, your employer pays:

• Superannuation (12% in 2026)

• Payroll tax and workers’ compensation

• Your leave entitlements (annual leave, sick leave, public holidays)

• Your overhead (equipment, software, office space)

• Time you spend on non-billable work (admin, proposals, professional development)

When you’re freelancing, you pay all of that yourself — out of your hourly rate.

The freelance hourly rate formula

Here is a simple but complete formula for setting your rate:

Hourly Rate = (Annual Target Income + Business Costs) ÷ Billable Hours Per Year

Let’s break each part down.

Step 1: Set your annual target income

This is the after-expenses income you want to take home. It should be based on your actual cost of living, not a round number.

Include: rent/mortgage, food, transport, insurance, savings, and anything else you spend money on each year.

Example: $90,000 per year after expenses.

Step 2: Add superannuation

If you want to save for retirement at the same rate as an employee, you need to contribute your own super. At the 2026 rate of 12%, that’s an additional:

$90,000 × 12% = $10,800 per year

Step 3: Add your business costs

List everything you spend to run your freelance business:

• Software and tools (accounting software, project management, time tracking)

• Hardware (laptop, phone, peripherals — amortised over their useful life)

• Professional development (courses, conferences, industry memberships)

• Insurance (professional indemnity, public liability)

• Marketing (website hosting, any paid promotion)

• Accountant fees

Example total: $8,000 per year.

Step 4: Account for tax

You’ll need to set aside money for income tax. Australian freelancers are taxed as sole traders or through a company structure, so the exact rate depends on your situation. A conservative estimate for planning purposes: set aside 30–35% of gross income for tax.

To work backwards: if you want $90,000 after tax, and you’re in the ~32.5% marginal bracket, your gross income target is approximately:

$90,000 ÷ (1 – 0.325) = ~$133,000 gross

Step 5: Estimate your billable hours

This is where most freelancers get it wrong. You will not bill 40 hours a week, 52 weeks a year.

Realistically, subtract:

• 4 weeks annual leave (you still need a holiday)

• 1–2 weeks sick leave (being realistic)

• 10 public holidays

• Non-billable time: admin, proposals, invoicing, business development, professional development — typically 20–30% of your working time

A realistic billable hours number for a full-time freelancer is 800–1,200 hours per year depending on your work type.

Example: 1,000 billable hours per year.

Step 6: Calculate your rate

Required Gross Income = $133,000 (after tax target)

+ Super = $10,800

+ Business Costs = $8,000

Total = $151,800

  

Hourly Rate = $151,800 ÷ 1,000 hours = $151.80/hr

So a freelancer targeting $90,000 take-home in Australia needs to charge approximately $150–155 per hour to sustainably cover their costs.

Should you add GST?

If your annual turnover is over $75,000, you are required to register for GST in Australia. Once registered, you add 10% GST on top of your hourly rate.

This is not additional income for you — it gets remitted to the ATO via your Business Activity Statement (BAS). Your rate is still $150/hr. You charge $165/hr to the client (which includes $15 GST), and you send that $15 to the ATO.

If you’re under $75,000 turnover, registering for GST is optional, but it can have advantages (you can claim GST credits on your business expenses).

Tip: Always state clearly on your quotes whether your rate is GST-inclusive or GST-exclusive. “Ex GST” is standard in B2B contexts in Australia.

What’s a typical hourly rate for Australian freelancers in 2026?

Rates vary significantly by specialty and experience. Rough benchmarks for 2026:

These are market rates, not what you should charge. Your rate should be based on your cost formula first, then validated against the market.

The ranges above are rounded 2026 planning benchmarks, compiled from Australian salary and hiring guides including the Hays Salary Guide FY26/27, the Robert Half 2026 Australia Salary Guide, and the Michael Page Australia Salary Guide 2026. Salary guides usually publish employee salary ranges rather than freelance invoices, so the hourly figures are adjusted to reflect contractor/freelancer overhead, non-billable time, and self-funded benefits.

If the formula gives you a rate significantly below market, you may be able to charge more. If it’s above market, you need to look at reducing costs, increasing billable hours, or adjusting your income target.

How to raise your rates as an existing freelancer

If you’ve been undercharging, raising rates feels risky. A few approaches that work:

New clients, new rate. Apply your new rate only to new clients. Existing clients stay on the old rate for a defined period (typically 6–12 months), then you give them notice before transition.

Annual CPI adjustment. Build a clause into your contracts for an annual rate adjustment tied to CPI. This normalises increases and avoids awkward conversations.

Value-based framing. When you raise rates, frame it in terms of what the client gets, not just what you charge. “From next quarter, my rate will be $X/hr, which reflects [new experience/service level/specialisation].”

Track your time to know if your rate is working

Setting a rate is only half the equation. The other half is making sure you’re actually billing the hours you planned to bill.

If you planned for 1,000 billable hours but you’re only invoicing 700, your effective rate is much lower than you calculated — even if your nominal rate is correct.

Tools like ChronoFlow help freelancers and small agencies track billable time against client retainers, so you can see exactly what you’re delivering versus what you’re billing.

Use the free hourly rate calculator to run your own numbers and adjust the inputs for your situation.

Summary

Setting a sustainable freelance hourly rate in Australia comes down to:

1. Set a realistic take-home income target

2. Add superannuation (12% in 2026)

3. Add your annual business costs

4. Gross up for income tax (~30–35%)

5. Divide by realistic billable hours (not 2,080)

6. Add GST on top if you’re registered (or when you cross $75k turnover)

The result will almost always be higher than your gut instinct says it should be. That’s not you being greedy — that’s the actual cost of running a freelance business in Australia.

Sources and assumptions

• ATO: GST registration — GST registration threshold and GST treatment.

• ATO: individual income tax rates — income tax planning assumptions for Australian residents.

• ATO: super guarantee rate — 2026 superannuation benchmark used in the calculation.

• Fair Work Ombudsman: 2026 public holidays — public holiday allowance used when estimating billable days.

• Hays Salary Guide FY26/27, Robert Half 2026 Australia Salary Guide, and Michael Page Australia Salary Guide 2026 — market-rate benchmarking for technology, digital, marketing, finance, legal, and professional services roles.