What should you actually charge?
Not what feels competitive — what the maths requires. Income, overheads and realistic billable hours in; your minimum hourly rate, day rate and GST-inclusive figure out.
Why contractors systematically undercharge
The instinctive way to set a contract rate is to take the salary you used to earn and divide by 2,080 — fifty-two 40-hour weeks. A $90,000 salary becomes "$43 an hour", you add a bit, quote $55, and feel expensive.
Eighteen months later you are exhausted and somehow earning less than you did employed. The arithmetic explains it. You do not bill 2,080 hours. Take off four weeks of leave and statutory holidays and you are near 1,840 working hours — and then quoting, invoicing, travel, admin and empty weeks take their share. At a realistic 60% billable, you have about 1,100 hours a year that earn anything. Spread $96,000 of income-plus-overheads across those and the break-even is roughly $87 an hour — before profit, and before anything goes wrong.
That is what this calculator makes visible: not what you are worth, but what you must charge for the business to work at all. Quote below the number it gives you and the shortfall is coming out of your evenings.
Reading the result
The headline figure is rounded up to the next $5 because nobody quotes $87.27. The exact break-even sits underneath, the day rate assumes eight billable hours, and the GST line shows what actually appears on your invoice if you are registered. Treat the result as your floor — competitive positioning goes on top of it, never below.
Put the rate to work
Quote a job at this rate
The rate carries across as a labour line — add scope and terms and send it.
quote.amit.marketing →Track the hours
Log the week, apply the rate, then push it all onto an invoice.
hours.amit.marketing →Keep more of it
Hnry pays your income tax, GST and ACC as you earn and files the returns — the admin side of contracting, gone.
See Hnry →Rate questions, answered
How do I work out my hourly rate as a contractor?
Why can't I just match my old salary's hourly equivalent?
What percentage of my hours are billable?
Should I quote my rate including or excluding GST?
How does ACC affect my rate?
Is this calculator free and private?
More free tools, no signup
Everything here runs in your browser and costs nothing. They also talk to each other — send hours or a quote straight into an invoice.