Contractor vs Employee Calculator Australia
Compare a contractor ABN arrangement against a permanent salary: adjust hourly/daily rates, billable weeks lost to unpaid leave, and business expenses to see genuine net income each way — with no assumed "contractor premium".
Insurance, tools, licences, accounting and other deductible business costs — reduce taxable income, not billings.
Contractor tax is estimated on net business income (billings − expenses) under the same FY 2026-27 resident settings as the employee panel. No employer super is assumed; GST registration above $75,000 turnover is a separate obligation and is not modelled.
After income tax and Medicare — before pricing the value of paid leave, employer super and job security, which sit outside this number.
| Component (annual, FY 2026-27) | Employee | Contractor |
|---|---|---|
| Gross income (salary vs billings) | $95,000.00 | $155,040.00 |
| Business expenses | — | −$8,000.00 |
| Billable weeks per year | 52 (paid leave included) | 48 |
| Taxable income | $95,000.00 | $147,040.00 |
| Income tax + Medicare + HELP | −$20,920.00 | −$38,415.60 |
| Annual net take-home | $74,080.00 | $108,624.40 |
| Employer super (12% SG) | +$11,400.00 | $0 (self-funded) |
| Effective net per hour | — | $59.55 |
What This Comparison Does Not Price
- Paid leave value — 4 weeks annual leave, sick leave and public holidays on the employee side are worth roughly 6–8 weeks of paid time.
- Employer super — $11,400/year of concessional-taxed contributions the contractor must self-fund to match.
- GST & structure — contractors register for GST above $75,000 turnover; some arrangements are deemed employment for super under ATO rules.
- Insurance & risk — professional indemnity, income protection and admin time are real contractor costs inside the expenses field.
What Changes When You Move to Contracting
Contractors under an ABN invoice for hours or days actually worked — no paid annual leave, sick leave or public holidays — and pay their own tax, insurance, tools and admin. Employee packages include 12% SG super on top plus leave worth roughly 6–8 weeks of paid non-work time.
GST, Tax and Structural Caveats
Contractors must register for GST once turnover reaches $75,000 and price invoices accordingly (this tool compares pre-GST income). Deductible business expenses reduce taxable income; some "contractor" arrangements are actually deemed employment for super purposes — check the ATO employee-vs-contractor guidance for your situation.
Frequently Asked Questions
What hourly rate replaces a $95,000 salary?
As a starting point: a contractor billing 46 weeks needs roughly $57/hr to match $95,000 gross — but add expenses, lost leave and self-funded super, and the break-even rate is materially higher. Use the comparison below to test your own numbers.
Does this include GST?
No — GST is collected on behalf of the ATO and is not income. Compare rates exclusive of GST; register when turnover exceeds $75,000.
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