Why Australian Electricians Are Losing Money on Labour Costs (And How to Fix It)
Most electricians know their materials cost to the cent. But labour? That's where the money quietly disappears — through unbilled travel, jobs that run over time, and charge-out rates that don't cover true costs. Here's how to find the leak and fix it.
The Hidden Labour Leak
Survey electrical contractors and most will tell you their biggest profitability problem isn't materials — it's labour. Specifically, it's labour that was worked but never billed. Here are the most common sources:
Travel time
Driving to a job is time. If you have 3 technicians each making a 30-minute round trip per day and you're not billing it, that's 1.5 hours of labour cost with zero revenue attached.
Jobs that run over
You quoted 2 hours. It took 3.5. If you don't track actuals vs. quoted, you won't know which job types consistently blow out — and you'll keep underpricing them.
Small add-on tasks
The customer asks "while you're here, can you just...?" Those 20-minute additions rarely make it onto an invoice. Over a month, they add up to hours of unbilled work.
Waiting time
Waiting for access, for an inspector, for materials to arrive. If your staff are on-site and waiting, that's a cost. Whether you can bill it depends on your contract, but you need to know it's happening.
Incorrect charge-out rate
The most systemic leak: pricing labour based on wage cost alone, forgetting super, leave loading, vehicle, tools, insurance, and overhead. You can bill every hour and still lose money.
The Real Cost: A Worked Example
3 Field Technicians, 30 Minutes Unbilled Per Day
That's nearly $40,000 in revenue from work already done — just from 30 unbilled minutes per person per day. For most businesses, the actual figure is higher.
Travel Time: Should You Bill It?
The short answer: yes, for most jobs. Travel time is a real cost — wages, fuel, vehicle depreciation — and if you absorb it on every job, it compounds quickly.
Common approaches in Australia
Call-out fee
A fixed fee (e.g. $80–$120) that covers the first 30 minutes of travel. Common for residential. Include it in your quote and state it clearly.
Free travel within X km
Offer free travel within a service radius (e.g. 20 km from your base), charge per km beyond. Works well for local service businesses.
Travel billed at reduced rate
Charge 50–75% of your labour rate for travel time. Keeps costs reasonable for customers while recovering your cost.
Include in hourly rate (sole traders)
Build average travel cost into your base hourly rate. Simpler for customers, but only works if your jobs are geographically similar.
How to Calculate Your True Labour Cost Rate
Most electricians know their hourly wage. Fewer know their true labour cost — the actual cost to the business for every hour a technician is on the clock.
True Labour Cost Calculation (Example)
This is a simplified example. Your actual figures will vary based on your award, state, and business structure. The key point: base wage alone is typically 60–65% of your true labour cost.
Field Timesheet Systems: Paper vs. App
Paper Timesheets
- • Filled in from memory (end of day or week)
- • No link to specific jobs or cost codes
- • Must be manually entered into payroll
- • Easy to lose or misplace
- • No real-time visibility for managers
App-Based Timesheets
- Logged in real time — tap start/stop per job
- Linked to specific jobs for job costing
- Works offline — syncs when back online
- Flows directly to payroll export
- Manager visibility in real time
Job Costing: Reviewing Actuals vs. Quoted
Job costing closes the loop on every job: did you make money on this one? The process is simple:
Quote stage
Record estimated hours and materials cost per job.
During the job
Field staff log actual hours per job in real time. Materials used are recorded against the job.
Job complete
Compare actual hours vs. quoted hours. Compare materials used vs. quoted materials.
Invoice
If variations occurred and your contract allows, invoice for extras. If not, note the job as a loss leader and adjust your estimating assumptions.
Monthly review
Identify patterns: which job types consistently run over? Which are consistently profitable? Use this to improve future quotes.
FAQ
What is a fair charge-out rate for an electrician in Australia?
$100–$140/hr for most contractors. This needs to cover base wage, super (11%), leave loading (17.5%), tools, vehicle, overhead, and margin. Many electricians undercharge by pricing from base wage alone.
Should I charge for travel time?
Yes. Travel is a real cost. Use a call-out fee, travel radius policy, or reduced travel rate — but recover the cost somehow. State it clearly in every quote.
What is job costing?
Comparing quoted hours and materials against actual hours and materials used. It shows which jobs were profitable and helps you improve your estimating for similar future work.
How do I get staff to fill in timesheets?
Reduce friction. Real-time mobile apps with tap start/stop, linked to specific jobs, see dramatically higher compliance than paper forms filled in from memory.
What is leave loading?
17.5% additional pay on top of ordinary wages during annual leave, required by the National Employment Standards. Must be included in your charge-out rate or you absorb the cost during leave periods.
Key Takeaways
- 30 unbilled minutes per technician per day costs $13,200/year in lost revenue
- True labour cost is typically 150–160% of base wage when you include all oncosts
- Always charge for travel — use a call-out fee or travel policy
- Real-time app-based timesheets dramatically outperform paper
- Job costing reveals which work is profitable and where your estimates are wrong
Track Every Hour. Bill What You Earn.
TPT field timesheets let your team log hours by job from any phone — even offline. See actuals vs. quoted in real time. Export to payroll in one click. Stop losing money to unbilled labour.
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