Why Tradies Need to Know Their Numbers
Most tradespeople focus on doing great work — but fail to track whether the business is actually profitable. Common mistakes:
The #1 Pricing Error
Not including overhead in your hourly rate. Your "cost" isn't just your wages — it includes vehicle, insurance, tools, software, ACC, KiwiSaver, and downtime. A good rule of thumb for NZ tradies:
Charge rate = (desired take-home ÷ billable hours) × 2.0–2.5
If you want $80k take-home and bill 1,600 hours/year: minimum charge rate = $80,000 ÷ 1,600 × 2.2 = $110/hr
Gross Margin Benchmarks
| Business type | Typical gross margin |
|---|---|
| Labour-only trades (electricians, plumbers) | 40–60% |
| Material + labour (builders, concreters) | 25–40% |
| Maintenance / service work | 50–70% |
Under 20% gross margin = your business is working hard for very little. Use our Hourly Rate Calculator to set the right rate.