Electrical contractor charge-out survey

In September and October 2008, as part of its Market Monitor 2008 survey, the National Electrical and Communications Association (NECA) surveyed charge-out and pay rates of Australia’s electrical contractors. Some 2235 contractors responded, providing an excellent report on the industry’s charging methods and hourly rates for tradesmen and apprentices and these were compared on a state-by-state basis.

The report provided some valuable information for NECA in helping to build a profile of the electrical industry and identify key concerns and challenges which contractors face, and which the industry should be addressing.

Of the respondents, 47% had 2–5 employees, 13% had 6–10 employees and 16% had 10+ employees. NECA members made up 57% of respondents, while the other 43% were non-NECA members.

Call-out fee

Australia wide, just over half of electrical contractors (56%) charge a call-out fee. A similar number charge an hourly rate only (59%), or work on a fixed rate, depending on the job (55%). The total numbers add up to more than 100% as respondents could answer more than one option — some electricians mix it up. There is some variation by state — South Australians are least likely to charge a call-out fee — but these are not significant.

For electrical contractors who charge a call-out fee, most are in the $60–80 range, with the average figure around $75. Call-out fees differ significantly by state. NSW and Queensland are lowest (average of $68 and $73 respectively) and Western Australia and the territories are the highest (all averaging $85).

The results indicate that there is no standard method of charging. In the full survey, in which an open-ended question was asked about key concerns in the industry, many respondents complained about this lack of standardisation in the industry.

Hourly rates

The average hourly rate for an electrical tradesperson in Australia is $66, but there are wide variations above and below this figure. Again, the great disparity and lack of uniformity leads to many charges of undercutting and unprofessionalism in the industry.

Western Australia has by far the highest overall average of $80, while the other states averaged in the vicinity of $65–70, not varying much from each other. Note that the survey was conducted in September/October 2008, before the worst of the current economic problems had occurred and while Western Australia’s mining industry was still healthy.

Statistics from the survey indicated that, on a national scale, 7% charged $50 or less, 23% charged $50–60, 29% charged $60–70, 19% charged $70–80, 12% charged $80+ and 10% were not applicable (didn’t charge out on an hourly basis).

Apprentice rates

Rates for apprentices vary significantly, but by year of apprenticeship, rather than by state (although South Australia is consistently lower). The national average is around $30 for the first year, $40 for the second year, $45 for the third year and $50 for the fourth year.

More details on the survey can be downloaded from www.neca.asn.au.

NECA has developed recommended charge-out rates for most states and they reflect what NECA considers to be a fair return on the investment, risk and effort involved in running a contracting business, rather than a basic recovery of costs. These recommended rates are often higher than what the average contractor is currently charging. NECA members are encouraged to use these recommended rates as their minimum charge-out rates to enable them to run a profitable business.