How do I compare a contractor day rate to a permanent salary in Australia?

Add up all the benefits a permanent employee receives on top of base salary that a contractor must self-fund: superannuation (12% Superannuation Guarantee from 1 July 2025), 4 weeks paid annual leave (NES s87), 10 days paid personal/sick leave (NES s96), approximately 11 public holidays (NES s114), and a buffer for downtime and insurance costs. The total is the equivalent permanent package. Divide that by your expected billable days to get the break-even day rate.

What is a realistic number of billable days for a contractor in Australia?

A common rule of thumb is 220 billable days per year, based on 260 working days minus 20 days annual leave, 10 days sick/personal leave, and 11 public holidays, less a small buffer for between-contract gaps. If you work in a project-based industry with frequent gaps, 180–200 days may be more realistic. Adjusting the billable days in the calculator changes the break-even rate significantly.

Does a contractor have to pay their own superannuation in Australia?

If you are a genuine independent contractor (not an employee under the Fair Work Act or the superannuation legislation), your client is generally not required to make Superannuation Guarantee contributions on your behalf — unless you are engaged primarily for labour under a contract that is wholly or principally for your labour. In practice, most day-rate contractors operating through their own ABN or company need to make their own super contributions. The current SG rate is 12% (from 1 July 2025), so a contractor earning the equivalent of a $100,000 salary needs to set aside $12,000 in super themselves.

What is the break-even day rate for a $100,000 permanent salary?

At 220 billable days per year, the break-even day rate for a $100,000 base salary is approximately $607 per day. This accounts for $12,000 in superannuation (12%), $8,032 in annual leave value, $4,016 in sick leave, $4,418 in public holiday pay, and a $5,000 downtime/insurance buffer, giving a total equivalent package of approximately $133,466.

Is contractor income taxed differently to a permanent salary in Australia?

Yes. Permanent employees have tax withheld through the PAYG withholding system. Contractors operating through their own ABN or company manage their own tax obligations, which can include GST (if registered), income tax via a business tax return, and potentially Division 7A or personal services income rules. This calculator focuses on the pre-tax package comparison; use the Contractor Tax Calculator on FairWork Mate for an after-tax estimate.

Contractor Day Rate vs Salary Break-Even Calculator

Enter your permanent base salary and an offered day rate to see the true equivalent package (including super, leave and a downtime buffer), the break-even day rate, and whether the contract is better or worse than staying permanent. General information only — not financial advice.

Last verified: 21 May 2026

General information and estimates only — not legal, financial or tax advice. Always check your specific award, agreement or contract, or a qualified professional, before you rely on the result.

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