How to use this calculator
- Enter the base salary you'd be paid as an employee, without super.
- Enter the contract rate you've been offered, excluding GST.
- Be realistic about contract hours and weeks. Employees get about 4 weeks of annual leave, 10 days of personal leave and public holidays paid; contractors don't.
How it's calculated
Super = salary × 12%
Employee package = salary + super + other benefits
Contract hours = hours per week × weeks per year
Break-even rate = employee package ÷ contract hours
Worked example
Liam is offered a job at $95,000 plus super, or a contract at $70 an hour (excluding GST) for 38 hours a week, about 44 weeks a year.
Super = 95,000 × 12% = 11,400
Employee package = 95,000 + 11,400 = 106,400
Contract hours = 38 × 44 = 1,672
Break-even rate = 106,400 ÷ 1,672 = $63.64/hour
Contract income = 70 × 1,672 = 117,040
The contract needs at least $63.64 an hour. At $70 it's worth about $10,640 more a year, before insurance, equipment and accounting costs.
What this calculator doesn't cover
- Income tax, which is similar either way, and business deductions available to contractors.
- Personal services income (PSI) rules, which can limit deductions for some contractors.
- Whether you'd legally be a contractor. It depends on the whole working relationship, not the contract's title.
Frequently asked questions
Do contractors get super?
Sometimes. If you're paid mainly for your labour, the business may still have to pay you super even if you have an ABN. Otherwise you'll need to fund your own. Check the ATO's employee or contractor guidance.
Should my rate include GST?
Quote your rate excluding GST. If you're registered for GST, add 10% on your invoices. Our GST calculator does the maths.
Source: ATO super guarantee rate.