How much should you charge as a freelancer in Australia?

The reason so many Australian freelancers are busy and still short of money is that they priced against a salary. A salary is not a comparable number. It already includes superannuation someone else pays, four weeks of leave you still get paid for, sick days, and a desk, a laptop and software you did not buy. Set your rate by matching a salary and you have quietly agreed to fund all of that yourself out of the same figure.

Here is how to build the number from what your business actually has to produce, and the two Australian rules that change the answer.

Start with what you need, not what others charge

Benchmarking against other freelancers tells you what the market tolerates. It does not tell you whether your business works. Build your floor first, then check it against the market, and if the market number is lower than your floor, the problem is the type of work rather than the rate.

Five inputs:

1. What you need to earn in a year, before tax. Not what you would like. What the year costs.
2. Business costs. Software, insurance, phone and internet, accounting, hardware amortised over its life, professional development, bank and payment fees.
3. Time you will not be paid for. You have no paid leave. Four weeks off, plus public holidays, plus the days you are sick, is roughly six weeks a year you earn nothing.
4. Super, if you want any. As a sole trader you generally do not have to pay super guarantee for yourself, so if you want it, it is a cost line, not an automatic deduction.
5. Billable hours, not working hours. This is the number that wrecks most calculations.

Why billable hours are the whole calculation

Quoting, invoicing, chasing, bookkeeping, email that belongs to no project, the afternoon a file would not export — none of that is billable and all of it is work. If you assume you will bill 38 hours a week, your rate is built on a week that does not exist.

Measure your own rather than borrowing a figure. Track total hours worked and billable hours for one month. It is the single most useful number a freelance business can have, and almost nobody has it. Once you do, the same figure answers the other question you need it for — whether you have room for another client, which we go through in working out whether you can take on another client this month.

The maths, with the steps visible

Run it once and the result is usually uncomfortable, which is the point. It is not a target. It is the line under which you are subsidising clients out of your own time.

GST is not income

Once you are registered for GST, the 10% you add is collected on behalf of the ATO and sent to it through your BAS. It is not a rate rise and it should never be treated as one in your cash planning.

You must register once your GST turnover reaches $75,000 a year, measured either as the current 12 months or the next 12, and you have 21 days from the point you are required to register. The detail is on the ATO’s registering for GST page.

Two practical effects on your rate. If your clients are businesses that are themselves registered, adding GST costs them nothing in the end, because they claim it back — so crossing the threshold is rarely a pricing problem in business-to-business work. If your clients are consumers, it is, because a consumer pays the full amount and cannot claim anything. How you display it also changes: the ACCC’s guidance on price displays requires a single total price including GST for consumers, while prices shown only to other businesses do not have to include it.

The super rule that changes what your rate should be

This one is widely missed. If a client pays you mainly for your own labour, the ATO treats you as an employee for superannuation guarantee purposes, and the client may have to pay super for you on top of your invoices — even though you have an ABN.

The ATO’s page on super for independent contractors sets out when it applies: the contract is mainly for your labour, meaning more than half its dollar value; payment is for your personal labour and skills rather than depending on achieving a specified result; and you have to do the work yourself rather than being able to delegate it.

Its own example is a freelance administrative assistant with an ABN, invoicing weekly for hours worked under a contract that says she must do the work herself. She is an employee for super purposes, and the business has to pay super contributions in addition to her pay.

Two things follow for your pricing:

• An ongoing hourly arrangement where you personally do the work is a different commercial animal from a fixed-price project for a result. If you are in the first kind, super may be owed to you on top, and it is worth establishing that at the start rather than a year in.
• The ATO is explicit that paying you extra cash instead does not count. An amount equal to the super percentage added to your invoice is not a super contribution — it has to go to your fund.

The distinction between being paid for a result and being paid for your time also runs through how you should quote, which is the subject of how to write a quote for freelance work in Australia, and it is one of the two things that actually separate a freelancer, a sole trader and a contractor — see freelancer, sole trader or contractor in Australia.

Hourly or fixed price?

Hourly protects you when the scope is genuinely unknown. Fixed price pays you better when you are good, because the client is buying the outcome rather than your afternoon.

The rule that keeps both honest: quote fixed price for work you have done before, and hourly for work you have not. Your estimate on the fifth project of a type is reliable. Your estimate on the first is a guess with your money on it.

Either way, keep an hourly change rate on the quote so additions have a published price instead of a negotiation. That is the mechanic in how to stop scope creep before it starts.

Day rates, and why they are not your hourly rate times eight

Studios, agencies and production companies in Australia often do not ask for an hourly rate at all. They ask what you cost for a day, because that is the unit their own schedule is built in. If you only have an hourly number, you will either convert it badly on the phone or quote the first figure that sounds defensible.

The conversion people reach for is hourly times eight, and it is the wrong model — not because the number is too high or too low, but because it is measuring the wrong thing. A day rate does not price hours. It prices exclusivity. When a client books Thursday, three things happen that an hourly engagement does not do:

• You cannot sell that day to anyone else. Not the morning, not the gap between their meetings.
• You cannot fragment it. Hourly work can be slotted around other work. A booked day cannot, which is exactly why the client wants it.
• You deliver fewer billable hours than the day contains. A booked day realistically produces around six hours of actual output once you account for their stand-up, the handover conversation and the fact that nobody is productive for eight consecutive hours.

So the arithmetic runs in this order:

1. Find the floor. Take the hourly rate you calculated earlier in this guide and multiply it by the hours you can genuinely deliver in a booked day. That is what the day is worth if it were sold hourly, and it is the number you must not go below.
2. Add the exclusivity. The difference between that floor and your day rate is what the client is paying for the right to have all of it. How much depends on how much other work you turn away to take the booking.
3. Check it against your own annual maths. Divide your target revenue by the number of billable days you can realistically sell in a year — the same billable-capacity thinking as the hourly calculation, one unit up. If your day rate is below that figure, a diary full of day bookings still misses your target.

The reason the third step matters is that day rates feel larger than hourly rates and are easier to underprice. A number that sounds like a good day can still be a bad year.

Half-days usually cost you more than half

Clients ask for half-days because a half-day sounds like half the commitment. It rarely is. A half-day booked in the morning does not leave you a sellable afternoon — nobody buys four hours at short notice, and the day is broken for anything that needs a long run at it.

So price a half-day at more than half your day rate, and be able to say why in one sentence: the other half of the day is not sellable, so a half-day booking costs you most of a day of capacity. If a client pushes back, the alternative to offer is a fixed price for the specific piece of work rather than a discount on the unit.

What a day rate has to specify

Two things, in writing, or the unit quietly stops meaning anything:

• The hours the day covers, and what happens beyond them. A day that starts at 9 and finishes when the work is done is not a day rate, it is an open commitment with a fixed price.
• Whether travel, briefings and revisions sit inside or outside the day. A day on site is not the same as a day at your desk, and travel time is capacity you cannot sell either.

Retainers: you are selling reserved capacity, not discounted work

A retainer is the most valuable thing a freelance business can have and the easiest thing to price badly. Priced well, it puts a floor under your income and makes the rest of the year plannable. Priced as a bulk discount, it converts your best client into your worst-paid one.

The distinction to hold on to: a client on a retainer is not buying cheaper hours. They are buying the guarantee that you will have capacity for them. That guarantee is what stops you taking a project that would have filled the month — which means it has a real cost to you whether or not they use it.

The failure mode is always the same and it is worth naming precisely. A retainer sold as a number of hours a month becomes, within two months, general availability. Small requests arrive without being counted because counting them feels petty. Then at the end of the month the hours are either overspent, which you absorb, or underspent, which the client wants carried forward. Both outcomes move value from you to them, and neither was ever agreed.

Five things a retainer has to state:

• What it buys. Either a number of hours or a defined scope of work. “Ongoing support” is not either of those.
• Whether unused time rolls over. The clean answer is that it does not, and the reason belongs in the agreement rather than in an argument later: the fee reserves capacity for the month, and reserved capacity cannot be stockpiled. If you do allow a rollover, cap it at one month.
• Response time. This is usually the thing the client actually wants and rarely the thing that gets written down. “Same business day for urgent, two business days otherwise” is a commitment you can keep and they can rely on.
• What sits outside it. New builds, new campaigns, anything with its own deadline. Retainers absorb whatever you do not exclude.
• Notice to end it, both ways. A month is the usual floor. Without it, the predictable income you priced the retainer around is not actually predictable.

Should the rate inside a retainer be lower?

Lower is defensible, and it should be a deliberate trade rather than a reflex. What you receive for it is a guaranteed invoice on a known date, no quoting cycle, and no gap between projects — genuine value for a one-person business, and the thing that makes the difference between a good year and an anxious one.

What you must not do is discount the rate and leave the scope open. A reduced rate against a defined scope is a trade. A reduced rate against unlimited availability is the arrangement that ends with you resenting your steadiest client.

Bill retainers in advance, at the start of the period they cover. A retainer invoiced after the fact is a retainer that has already lost its main advantage, and it puts you back to chasing.

When to raise your rates

The two honest signals are simple. You are fully booked and turning work away, or your floor has moved because your costs have. Being annoyed at a client is not a signal, it is a reason to review that client.

Raise on new clients first, and for existing ones give notice with a date: “From 1 February my rate moves to $X. Anything quoted before then is unchanged.” Most clients accept it because they have watched the same thing happen to every other supplier they use. The ones who leave over a modest rise were going to be a problem when something else came up.

Frequently asked questions

How do I convert a salary into a freelance rate?

You cannot convert it directly, because a salary includes super, paid leave and an employer’s overheads. Take the salary you want in your pocket, add your business costs, add the super you want to pay yourself, divide by the weeks you will actually work, then divide by your measured billable hours per week.

Should I put my rates on my website?

A starting figure filters out enquiries that were never going to convert, which is worth real time. Publishing a full rate card mostly invites comparison on price alone. “Projects typically start from $X” does the filtering without the comparison.

Do I have to pay myself super as a sole trader?

Generally no. Sole traders are not required to pay super guarantee for themselves, and can choose to contribute. Because it is optional, it does not happen unless you build it into the rate deliberately, which is why it belongs in the calculation as a line rather than as an afterthought.

What do I do when a client says my rate is too high?

Do not discount. Reduce the scope to fit the budget and say which part you are removing. “I can do it for $4,000 if we drop the two case study pages.” That keeps your rate intact, gives them a real choice, and tells you whether the constraint was the budget or the value.

Should I charge a deposit?

Yes on project work. A quarter to a half up front is ordinary, and it is the difference between a stalled project costing you a fortnight and costing you the whole job. Frame it as what it buys: the deposit books the time in your calendar.

How do I work out a day rate if I already have an hourly rate?

Multiply your hourly rate by the hours you can genuinely deliver in a booked day — around six for most people, not eight — to get the floor. Then add an amount for exclusivity, because the client is buying a day you cannot sell or split. Finally, check the result against your target revenue divided by the billable days you can realistically sell in a year. If the day rate does not clear that figure, a full diary still misses your target.

What should I charge for a half-day?

More than half your day rate. A half-day booking usually costs you most of a day of capacity, because the remaining hours are not long enough to sell or to do deep work in. If the client wants to pay less than that, quote a fixed price for the specific piece of work instead of discounting the unit.