January 2026 · 5 min read

HOW TO CALCULATE YOUR REAL HOURLY RATE (NOT THE ONE YOU THINK)

Here's a question most tradies and freelancers can't answer honestly: what do you actually earn per hour?

Not the rate you quote clients. Not the number on your invoice. Your real hourly rate — the money that actually lands in your pocket after you subtract fuel, materials, insurance, rego, phone bills, and all the hours you spend quoting, driving, and doing admin.

Most people guess high. The reality is often uncomfortable.

THE FORMULA

Your real hourly rate is simple maths, but most people never do it:

The key word is all. Not just the materials you bought for the job. Everything that costs you money to run your business and every hour you actually spent — including the unpaid ones.

WHAT MOST PEOPLE GET WRONG

1. They only count "on the tools" hours

If you quote 6 hours for a job but spend 45 minutes driving there, 20 minutes quoting, and an hour buying materials — that's actually 8 hours. Your hourly rate just dropped by 25%.

2. They forget recurring expenses

Vehicle insurance, public liability, tools, phone plan, accounting software, fuel — these costs exist whether you're working or not. They need to be spread across your jobs.

3. They confuse revenue with profit

Invoicing $1,200 for a job doesn't mean you earned $1,200. If you spent $300 on materials, $80 on fuel, $50 on a helper, and worked 15 hours total — you earned $51/hr, not $80/hr.

A REAL EXAMPLE

Let's say you're a landscaper and you just finished a retaining wall job.

You might have thought you were earning $100+/hr based on the $4,800 invoice. The real number is $52.76. That's not bad — but it's half what most people assume.

Now imagine doing this for every job over a month. Some jobs are profitable. Some are barely worth it. Without tracking, you'll never know which is which.

WHY THIS MATTERS

Knowing your real hourly rate changes how you price jobs. If you find out you're actually earning $28/hr on cleaning jobs but $65/hr on landscaping, you know where to focus. You can raise prices on low-margin work or stop doing it altogether.

It also helps you spot the hidden costs killing your profit:

• Too much drive time — are you taking jobs too far from home?
• Underquoting — are you consistently going over your estimated hours?
• Material waste — are you overbying for jobs?
• Unpaid admin — how many hours a week do you spend on paperwork?

HOW TO TRACK IT

You could use a spreadsheet. But realistically, you're on a job site at 6am — you're not opening Excel.

That's why we built TheBrickBook. It's a free iOS app that does exactly this:

1. Log the job — client, job type, quote amount
2. Start the timer when you arrive on site
3. Add expenses as they happen (materials, fuel, wages)
4. See your real hourly rate instantly — before you even send the invoice

No monthly fee. No accounting degree needed. Just clarity on what you actually earn.

THE BOTTOM LINE

Your real hourly rate is probably lower than you think. That's not a failure — it's just information you didn't have before. Once you know the number, you can change it. Price better. Cut the wrong jobs. Focus on the profitable ones.

The tradies and freelancers who make real money aren't necessarily the busiest ones. They're the ones who know their numbers.