Contractor rate calculator (Australia and NZ)
Turn a salary into the day rate or hourly rate you need to charge as a contractor or freelancer, or turn a contract rate back into the equivalent salary. It allows for super (or KiwiSaver), annual leave, public holidays, sick days, unbilled time, business costs and GST.
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CalculatorWorked examplesWhy contractors charge moreFAQ
Worked examples
Australia: matching a $120,000 salary. Assumptions: 12% super, 20 days annual leave, 10 public holidays, 10 sick days, 10 other unbilled days, 7.6 hours a day, and $5,000 a year in business costs.
- Billable days: 260 − 20 − 10 − 10 − 10 = 210.
- Income needed: $120,000 + $14,400 super + $5,000 costs = $139,400.
- Day rate: $139,400 ÷ 210 = $663.81 (ex GST), or $730.19 including GST.
- Hourly rate: $663.81 ÷ 7.6 = $87.34. On salary, the same job pays $120,000 ÷ (52 × 38 hours) = $60.73 an hour.
New Zealand: what is $90 an hour worth? Assumptions: 3.5% KiwiSaver, 20 days annual leave, 12 public holidays, 10 sick days, 10 other unbilled days, 8 hours a day, and $5,000 costs.
- Billable days: 208. Day rate: $90 × 8 = $720. Billing a year: $149,760.
- Less $5,000 costs = $144,760, so the salary equivalent is $144,760 ÷ 1.035 = $139,864.73, plus $4,895.27 KiwiSaver.
Why contractors charge more than the hourly salary rate
- No paid leave. Employees are paid for about 50 days a year they don't work (annual leave, public holidays, sick days). Contractors only earn on the days they bill.
- Super / KiwiSaver. In Australia, contractors usually pay their own super. The 12% super guarantee can still apply if you're paid mainly for your labour (the ATO's "contractor for SG" test), even with an ABN. In NZ, contractors don't get employer KiwiSaver contributions.
- Business costs: professional indemnity and public liability insurance, income protection, ACC levies (NZ), equipment, software and accounting.
- Gaps between contracts, admin and unpaid quoting time. That's what the "other unbilled days" box is for.
- Tax isn't lower. Contractors pay the same income tax on profit as employees pay on wages, but usually pay it later, so set some aside. In Australia you may also need PAYG instalments.
This calculator is about pricing. Whether someone is legally an employee or a contractor depends on the whole working relationship, not the label or an ABN. See the ATO's employee or contractor guidance, or Employment NZ.
FAQ
How do I convert a salary to a contractor day rate?
Add employer super (12% in Australia) and your yearly business costs to the salary, then divide by the days you can actually bill. That’s 260 weekdays minus leave, public holidays, sick days and gaps, typically 200 to 220 days. On $120,000 with 210 billable days and $5,000 of costs, that’s about $664 a day.
What is a good contractor hourly rate compared to salary?
As a rule of thumb, a break-even contract hourly rate is about 1.3 to 1.5 times the employee hourly rate for the same salary. In our Australian example it’s $87.34 against $60.73, or 144%. Market rates in your field matter more than any formula, so treat this as the floor.
Do contractors get paid super in Australia?
Not usually: most contractors with an ABN fund their own super. But if you’re paid mainly for your labour under a contract that’s wholly or principally for your labour, the business may have to pay you the 12% super guarantee even though you have an ABN.
Should I include GST in my rate?
Quote rates excluding GST and add GST on the invoice if you’re registered. Registration is required in Australia once turnover reaches $75,000 a year, and in NZ at $60,000. GST isn’t your income; you pass it on to the ATO or IRD.
How many billable days are there in a year?
There are about 260 weekdays. Take off 20 days of annual leave, 10 to 13 public holidays, about 10 sick days, and time between contracts or on admin. Most full-time contractors bill 200 to 225 days.
How do I turn a day rate into a salary?
Choose "Turn a contract rate into a salary", enter the day or hourly rate and the calculator reverses the maths. It multiplies by billable days, takes off business costs, then splits the rest into salary and super or KiwiSaver.
Is this a contractor vs employee test?
No. It compares pay. Whether you’re legally an employee or contractor depends on the real working relationship: control, the right to subcontract, who supplies tools and who bears the risk. The ATO and Employment NZ have official guidance.
Sources (checked 17 Oct 2026): ATO Super guarantee rate (12%); ATO Super for independent contractors; ATO Employee or independent contractor; Fair Work Annual leave (4 weeks) and sick and carer's leave (10 days); IRD KiwiSaver employer contributions (3.5% from 1 April 2026); Employment NZ public holidays (11 national holidays plus a regional anniversary day).
General information, not tax or legal advice. The rates here are break-even planning figures. Market rates for your field may be higher or lower. Check employment status and super obligations with the ATO, IRD or an adviser.