Charging For Time

Hamish Mexted ACC, Managing Cash, Odds & Ends

Charging for time


For many service industries, it is still common to be charging for work completed by the hour. However we see so often that the rate is far too low and doesn’t account for some essential costs involved.





Firstly, are you GST registered? If so, you need to charge your hourly fee then add GST on top of that. We see a lot of people undercharging this which is essentially meaning that they are undercharging by 15%. Put another way, you’re essentially giving the customer a 15% discount on your rate without them even asking for it.


A lot of people are also GST registered meaning that they’re able to claim the GST on your fee back from the IRD. Therefore if they are GST registered, make sure they’re aware of this as this will show your rate as being lower.




Another common way for people to cut their rate short is by not charging for ACC. It may onlt seem like a small fee per hour, but it definitely adds up. So make sure you factor this into your rate as well!


Do you charge for all of your time spent


There are many hours of work that you do that the client won’t see, for example, research. Other work time that people often don’t charge for are meetings and travel.


Do you charge for this? If not, why? I would recommend keeping tabs on the number of hours you do that you don’t charge for and see what it adds up to.  Lot of the time it will be around 25%!


How quikly are you invoicing your clients?


A lot of the time, businesses or contractors won’t send out invoices until days, weeks or even months once the job has finished. We would not see this as best practice as, especially if you’re charging by the hour, the client wont remember how long you spent at their office, in meetings with them, etc, so will either be angry about the total cost of the invoice and complain to others about it, will dispute the invouce meaning it takes you longer to be paid or even not pay at all!


Be upfront with clients


Final piece of advice would be, be upfront about what your rate is and what you charge for with clients before the work is even completed. This will ensure that everone is on the same page before you begin.