Skip to content
Aussie Salary& Tax CalculatorAussie Salary & Tax Calculator home

Contractor rate calculator

Estimate the hourly or day rate a contractor would need to charge to match an employee's salary, super and paid leave.

Indicative comparison only. This tool compares the value of employment with contract income on simple assumptions. It does not constitute financial or tax advice, and it does not work out whether you are legally an employee or a contractor.

Add the super guarantee an employee would receive.

Time an employee is paid for but a contractor is not
weeks
days
days
weeks
%

Insurance, accounting, equipment and admin time, as a percentage added to your target.

Indicative contractor rate

$70.18/ hour

$533/ day

Excluding GST. Before tax and your own super contributions.

Billable weeks

42

210 days a year

Employee hourly equivalent

$50.61

salary ÷ 52 paid weeks

How the rate is worked out

Employee salary
$100,000
Employer super
$12,000
Value of employment
$112,000
Target revenue incl. overheads
$112,000
Billable hours per year
1,596
Hourly rate
$70.18

Why contractor rates are higher than employee rates

An employee on a salary is paid for 52 weeks a year, including roughly four weeks of annual leave, public holidays and personal leave, and their employer pays super on top. A contractor is normally paid only for the time they bill, and covers those costs themselves.

The calculator works in three steps:

  1. Add employer super to the salary to get the full value of the employment.
  2. Subtract unpaid time – leave, public holidays, sick days and gaps between contracts – from 52 weeks to get billable weeks.
  3. Divide the value by the billable hours to get an hourly rate, and multiply by hours per day for a day rate.

Many contractors add a further margin for professional indemnity and public liability insurance, accounting fees, equipment, training and unpaid admin time. Use the overheads field for that.

What this comparison leaves out

  • Tax. Contractors usually pay their own tax through PAYG instalments and may be able to claim business deductions. Rates here are before tax.
  • GST. If your GST turnover is $75,000 or more you generally must register for GST and add 10% to your invoices. Rates here exclude GST.
  • Super. Some contractors paid mainly for their labour are still entitled to super guarantee from the business that engages them.
  • Job security and benefits such as redundancy pay, long service leave, parental leave and workers compensation cover.

The ATO explains the difference between employees and independent contractors. Our guide on employee salary vs contractor rate covers the trade-offs.

Frequently asked questions

How do I convert a salary to a day rate?

Add super to the salary, then divide by the number of days you expect to bill in a year. With four weeks of leave, ten public holidays, ten sick days and two weeks between contracts, that is about 210 billable days.

Is a contractor rate of double the employee hourly rate reasonable?

It is a common rule of thumb but it depends on your industry, how much downtime you expect and your business costs. This calculator shows the break-even rate for your own assumptions, which is usually a starting point for negotiation rather than a final answer.

Do contractors get super?

Often not, but it depends on the contract. If you are paid wholly or principally for your labour, the business engaging you may have to pay super guarantee even if you have an ABN. Check with the ATO or an adviser.

Related calculators

Estimates only. Calculations are estimates only and are provided for general information. They do not constitute tax or financial advice. Your actual tax depends on your full circumstances, including deductions, other income and offsets. Check the ATO website or speak to a registered tax agent before making decisions.