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Contractor vs Employee Calculator

An ABN contractor has to charge more per hour than an employee earns to end up with the same package, because the rate pays only for days worked. A $90,000 salary comes with 12% super, 4 weeks of paid annual leave, 10 days of paid personal leave and paid public holidays, and a contractor funds all of it from the rate. On a 38-hour week that salary matches about $60.01 an hour, or $456.11 a day. Enter a salary to see the matching rate, or a rate to see the salary it is worth, with your own business costs and the tax either way.

Your details

Before super. Leave loading is added separately.

The National Employment Standards give 4 weeks, 5 for a shiftworker under an award.

10 days a year under the National Employment Standards. Enter 0 to price none.

9 is New South Wales in 2026 on Fair Work’s list. Victoria and Western Australia have 10, the ACT 11, South Australia and the Northern Territory 9, Queensland and Tasmania 8.

Insurance, equipment, software, accounting. An employer would pay these.

Contractor rate that matches

$60.01 an hour

Day rate
$456.11
Employee base as an hourly rate
$45.55
Contractor rate above the employee rate
31.8%
Salary for the 221 days you would bill
$76,500
Paid annual leave, 20 days
$6,923
Paid personal leave, 10 days
$3,462
Paid public holidays, 9 days
$3,115
Super guarantee at 12%
$10,800
Invoice a year to match, GST excluded
$100,800
Income tax and Medicare levy on $90,000, the same either way
$19,320
Contractor: PAYG instalment, if paid quarterly
$4,830.00
Contractor: set aside each week
$371.54
GST: turnover of $75,000 or more must register
Register

The package is spread over 221 days: 260 weekdays less leave and public holidays, the days an employee is paid for and a contractor is not. Tax assumes the contractor claims the super they pay in as a deduction, so taxable income matches the employee’s. An employee has it withheld each payday; a contractor pays it through PAYG instalments, or as one bill when they lodge. Rates exclude GST.

Worked examples, with the arithmetic.

The same sums the tool runs, on real figures. Every number below is computed by the tested engine from the published rates, so the prose and the tool can never disagree.

What contractor rate matches a $90,000 salary?

$90,000 + 12% super               = $100,800
260 - 20 - 10 - 9 days            = 221 billable days
$100,800 / 221                    = $456.11 a day
$456.11 / 7.6 hrs                 = $60.01 an hour

About $60.01 an hour, or $456.11 a day, before GST and before any business costs. The same salary works out at $45.55 an hour for an employee, because it is paid for all 260 weekdays, leave and public holidays included, while a contractor bills only the 221 days worked and funds the super. That is 31.8% more per hour for the same package.

And with leave loading and $5,000 of business costs?

loading, 17.5% of 4 weeks         = $1,212
super on salary and loading       = $10,945
business costs                    = $5,000
invoice a year                    = $107,157
/ 221 days / 7.6 hrs              = $63.80 an hour

Where the award pays annual leave loading, and the contractor carries $5,000 a year of insurance, equipment and accounting, the matching rate rises to $63.80 an hour. Loading is qualifying earnings, so the guarantee is worked out on it too.

What salary is $80 an hour as a contractor worth?

$80 x 7.6 hrs x 221 days          = $134,368
/ 1.12, super funded yourself     = $119,971

Billing 221 days a year at $80 an hour brings in $134,368. Taking out the super an employer would have paid on top leaves the equivalent of a $119,971 salary with paid leave and public holidays, before any business costs.

Is this accurate, and how does it work?

The method is published rather than described. Nothing here is a black box, and the limits are listed as plainly as the workings.

  1. 1Price the paid days a contractor does not get. An employee is paid for all 260 weekdays of a 52-week year. Under the National Employment Standards that includes 4 weeks of paid annual leave and 10 days of paid personal leave, plus every public holiday on a working day. A contractor bills only the days left: 221 on the defaults. The ATO's own advice to contractors is to put money aside for holidays and for when you get sick. The Annual Leave Calculator and Sick Leave Calculator show what those entitlements are worth to an employee.
  2. 2Count the public holidays where you work. The default is 9, the New South Wales public holidays in 2026 that fall on a weekday in Fair Work's list. The same count is 10 in Victoria and Western Australia, 11 in the ACT, 9 in South Australia and the Northern Territory, and 8 in Queensland and Tasmania, leaving out regional, capital-city-only and part-day holidays. Change it to match where you are based.
  3. 3Add super, and leave loading where the award pays it. The super guarantee is 12% of salary, capped at the maximum contribution base. The ATO tells contractors to look after their own super unless they are contracted mainly for their labour. Annual leave loading of 17.5% is not a National Employment Standard, so it is a switch: turn it on if your award pays it. The Leave Loading Calculator shows the amount for an employee.
  4. 4Add your own costs, then divide by billable hours. Insurance, equipment, software and accounting fall on the contractor. Add them to the package, divide the total by the billable days for a day rate, and by the hours in a day for an hourly rate. The reverse runs the other way: a rate times billable hours, less costs, less the super you fund yourself, is the salary it matches. Every rate here excludes GST.
  5. 5Pay the same tax a different way. Taxable income comes out the same either way if the contractor claims the super they pay in as a deduction, which the ATO allows once the fund has acknowledged a notice of intent. The contribution is then taxed at 15% in the fund. So the income tax and Medicare levy are the same, worked out as the Income Tax Calculator does it. What differs is timing: an employee has tax withheld every payday, while a contractor sets it aside and pays PAYG instalments, usually every 3 months, or one bill when they lodge.

Contractor rates that match a salary.

On the calculator’s defaults: 38 hours a week, 4 weeks of annual leave, 10 days of personal leave, 9 public holidays, super at the guarantee rate, no leave loading and no business costs. Add your costs in the calculator and the rate rises.

Contractor hourly and day rates matching each salary
SalaryEmployee hourlyContractor hourlyContractor day rateInvoiced a year
$60,000$30.36$40.01$304.07$67,200
$75,000$37.96$50.01$380.09$84,000
$90,000$45.55$60.01$456.11$100,800
$110,000$55.67$73.35$557.47$123,200
$130,000$65.79$86.69$658.82$145,600
$160,000$80.97$106.69$810.86$179,200

Public holidays on a weekday, 2026.

Counted from Fair Work’s list of 2026 public holidays: full-day holidays that apply across the state or territory and fall Monday to Friday. Regional, capital-city-only and part-day holidays are left out. Fair Work lists Royal Hobart Regatta for some areas of Tasmania and Recreation Day for the areas that do not observe it, so a Tasmanian worker usually has one more than shown.

Weekday public holidays in 2026 by state and territory
State or territoryWeekday public holidays
Australian Capital Territory11
New South Wales9
Northern Territory9
Queensland8
South Australia9
Tasmania8
Victoria10
Western Australia10

Employee or contractor is a separate question.

The rate does not decide whether you are a contractor, and nothing here is a view on your arrangement. The ATO explains what it looks at for tax and super on Employee or independent contractor, and the Fair Work Ombudsman explains the whole of relationship test used under the Fair Work Act. If you are a contractor, the ATO’s list of what falls on you includes that you put money aside to pay for any holidays or if you get sick, and that you look after your own super unless you are contracted mainly for your labour.

What this does not cover.

  • It assumes a 52-week year of 260 weekdays and a 5-day week, and that every weekday not taken as leave or a public holiday is billed. Gaps between contracts, unbilled admin time and travel are not priced, and each lowers the real rate.
  • Long service leave, redundancy pay, notice, workers compensation and income protection are not priced, though an employee may be entitled to some of them.
  • Tax uses the resident rates, the low income tax offset and the Medicare levy, and assumes the super you contribute is claimed as a deduction. The personal services income rules are not applied; the ATO asks contractors to check whether they apply.
  • It does not tell you whether you are an employee or a contractor. That turns on the whole relationship, not the rate.
  • Rates exclude GST. Super is capped at the maximum contribution base.

Where these figures come from.

Every rate this site uses is listed on the Methodology page.

Common questions.

How much more should a contractor charge than an employee?

On the defaults, about 32% more per hour for the same package. A $90,000 salary is $45.55 an hour across 52 weeks of 38 hours, and $60.01 an hour once super is added and the package is spread over 221 billable days. Business costs, leave loading and gaps between contracts all push it higher.

How do I convert a salary to a contractor rate?

Add 12% super to the salary, and leave loading if your award pays it. Add your yearly business costs. Divide by the days you will bill, which is 260 weekdays less 4 weeks of leave, 10 personal leave days and the public holidays, then by your hours a day. For $90,000 with no costs that is $100,800 over 221 days: $456.11 a day, $60.01 an hour.

What salary is a contractor day rate worth?

Multiply the day rate by the days you will bill, take off your costs, and divide by one plus the super guarantee rate. $600 a day over 221 days is $132,600, the equivalent of a $118,393 salary with paid leave, public holidays and super on top. The Hourly Rate Calculator turns a salary into an employee's hourly rate for comparison.

Do contractors pay more tax than employees?

Not on the same taxable income. The resident tax rates, the low income tax offset and the Medicare levy are the same; what changes is how the tax is paid. A contractor has no employer withholding, so the ATO enters them into PAYG instalments once a tax return shows instalment income of $4,000 or more, tax payable of $1,000 or more and notional tax of $500 or more, or they can join voluntarily. The ATO also asks contractors to work out whether they receive personal services income, which has its own rules.

When does a contractor need to register for GST?

When GST turnover, the gross income from all your businesses less GST, reaches $75,000 or more over the current month and the previous 11, or is likely to over the next 12. Registration is due within 21 days. Taxi and ride-sourcing drivers register regardless of turnover. A registered contractor charges GST on taxable sales, so the rates here, which exclude it, are what you keep before tax.

Am I an employee or a contractor?

This calculator does not decide that, and the rate does not settle it. For tax and super the ATO looks at six things, including who controls the work, who bears the commercial risk and who supplies the tools, and it says an apprentice, labourer or trainee is always an employee. Under the Fair Work Act, constitutionally covered businesses use the whole of relationship test from 26 August 2024. Both are linked below the calculator.

Do I get super as a contractor?

The ATO says a contractor looks after their own super unless they are contracted mainly for their labour. The calculator assumes you fund it yourself at the 12% an employer would pay, and that you claim it as a deduction so it is taxed at 15% in the fund, as the employer's would be. Deducted contributions count towards your concessional contributions cap.

Related pages.

  • Hourly Rate CalculatorConvert an hourly rate to a weekly, fortnightly or annual salary and back again, with take-home pay after income tax and the Medicare levy.
  • Super Guarantee CalculatorWork out the superannuation your employer must pay on top of your wage at the 12% guarantee rate for 2026-27.
  • Annual Leave CalculatorWork out an annual leave payout when you leave a job: your unused hours at the base rate, any leave loading, and the tax withheld under Schedule 7 for 2026-27.
  • Income Tax CalculatorWork out income tax, the Medicare levy and the low income tax offset on any salary for 2026-27, with the bracket-by-bracket working shown.
  • Salary Comparison CalculatorCompare two job offers on take-home pay, with a package that includes super grossed down so the comparison is like for like.
  • Leave Loading CalculatorWork out annual leave loading on a period of leave, and check whether the 17.5% figure actually applies to you.

Every calculator on this site is listed on the Wage Calculator page.