Contractor rate calculator
Use this contractor rate calculator to turn an employee salary into the day rate and hourly rate you need to charge as a contractor in Australia. It adds the super you now pay yourself, your insurance and admin costs, and the weeks you won't be billing, so you can compare a contract offer with a permanent job on equal terms.
Updated 12 November 2026 · Uses 2026-27 figures
Work out your contractor day rate
Enter the salary you want to match, your billable weeks, your yearly costs and your billable hours per day.
General information only, not financial, tax or legal advice. Results are estimates based on 2026-27 figures and the assumptions shown. Check your award, agreement or a qualified adviser for your situation.
Looking for steady shifts or a permanent role? TQN Personnel places casual, contract and permanent staff across Australia.
Find workHow to use the contractor rate calculator
- Enter the employee salary you want to match, before super. Use the salary of a comparable permanent role.
- Enter the weeks you expect to bill each year. 44 weeks allows for leave, public holidays and gaps between contracts.
- Enter your insurance, accounting and admin costs for the year, such as professional indemnity, public liability, an accountant and software.
- Enter your billable hours per day, usually 7.6 or 8. The result shows the day rate, the hourly rate and the employee's hourly equivalent.
How a contractor rate is calculated
An employee's salary is only part of what they receive. Their employer also pays 12% super, and gives them paid annual leave, personal leave and public holidays. As a contractor you pay for all of that yourself, so your rate has to be higher than the salary divided by the hours in a year.
The calculator uses this method:
- Package to cover = salary + 12% super + your yearly business costs
- Billable days = billable weeks × 5
- Day rate = package ÷ billable days
- Hourly rate = day rate ÷ billable hours per day
All figures exclude GST. If your turnover is $75,000 or more you must register for GST and add 10% to your invoices.
Worked example
Mel is offered a contract and wants to match a $95,000 permanent salary. She expects to bill 44 weeks a year, spends $4,000 a year on insurance and accounting, and bills 7.6 hours a day.
Package to cover: $95,000 + $11,400 super + $4,000 costs = $110,400. Billable days: 44 × 5 = 220.
Day rate: $110,400 ÷ 220 = $501.82. Hourly rate: $501.82 ÷ 7.6 = $66.03.
The same salary as an employee works out to $48.08 an hour, so the contract needs to pay about 37% more per hour just to break even.
Contractor vs employee: what changes
| Employee | Contractor (ABN) | |
|---|---|---|
| Super | Paid by employer at 12% | Paid by you (usually; some contractors are owed super) |
| Annual and personal leave | Paid | Unpaid |
| Tax | Withheld from pay | You set money aside and may pay instalments |
| Insurance | Covered by employer, including workers comp | Your own cover |
| GST | Not applicable | Register at $75,000 turnover |
Whether someone is really a contractor depends on the whole working relationship, not just the contract or having an ABN. Our contractor vs employee guide explains the test. A contractor who is paid mainly for their labour can be entitled to super from the business even when they invoice on an ABN.
Hourly rate vs salary: what is a fair contract rate?
A common rule of thumb is that a contractor's hourly rate should be 30% to 50% above the employee hourly equivalent. The calculator lets you test your own numbers instead. Lower billable weeks, a short contract or high insurance costs push the rate needed higher.
How many weeks should a contractor plan to bill?
Allow for 4 weeks of holidays, about 2 weeks of public holidays, some sick days and time between contracts. 44 weeks is a reasonable starting point for a contractor with steady work. If you have gaps between jobs, try 40 or 42 weeks.
Should I add a margin for risk?
Contract work can end at short notice and has no redundancy pay. Many contractors add a buffer on top of the break-even rate, especially for short contracts.
Contract or employee through an agency
Many people who work through labour hire and recruitment agencies can choose to be paid as an employee of the agency, with super, tax and workers comp handled, rather than on their own ABN. That removes the admin and insurance cost, and the agency's charge rate to the client covers the on-costs. Use our ABN tax calculator to see how much tax to put aside if you do invoice on an ABN.
TQN Personnel places contract and temporary workers across Australia as employees, with pay, super and insurance managed for you. Register for work.
Frequently asked questions
How do I convert a salary to a contractor rate?
Add 12% super and your yearly business costs to the salary, then divide by the number of days you expect to bill. Divide the day rate by your billable hours per day for an hourly rate. For example, a $95,000 salary needs a day rate of about $502 over 220 billable days.
What is a contractor?
A contractor is an independent worker who runs their own business and is engaged to complete work, usually invoicing on an ABN. Unlike an employee, a contractor generally controls how the work is done, supplies their own tools and insurance, and isn't paid leave.
How much more should a contractor charge than an employee?
Usually 30% to 50% more per hour than the employee hourly equivalent, to cover super, unpaid leave, public holidays, insurance and gaps between contracts. A $95,000 salary is $48.08 an hour as an employee, but about $66 an hour as a contractor billing 44 weeks.
Do contractors get paid super?
Contractors usually pay their own super. However, if a contractor is paid mainly for their labour under a contract, the business may have to pay super guarantee for them, even if they have an ABN. Check the ATO's guidance on contractors and super.
How much does contractor liability insurance cost?
Public liability and professional indemnity cover for a sole trader often costs from a few hundred to a few thousand dollars a year, depending on the trade, the cover amount and claims history. Include your actual premiums in the insurance and admin field of the calculator.
How do I invoice as a contractor?
Your invoice should show your name and ABN, the client's details, the date, a description of the work, hours or days and rate, and the total. If you are registered for GST, call it a tax invoice and show the GST amount. Use our GST calculator to add 10%.
Related calculators
Related guides
Contractor vs employeeSources and assumptions
General information only, not financial, tax or legal advice. Results are estimates based on 2026-27 figures and the assumptions shown. Check your award, agreement or a qualified adviser for your situation.