* Calculation assumes a standard 5-day work week over 52 weeks (260 days total) before deductions. GST figures are relevant if you are registered for GST in Australia.
function calculateContractorRate() {
// 1. Get Input Values
var permSalary = parseFloat(document.getElementById("permSalary").value);
var superRate = parseFloat(document.getElementById("superRate").value);
var loadingPercent = parseFloat(document.getElementById("loadingPercent").value);
var annualOverheads = parseFloat(document.getElementById("annualOverheads").value);
var leaveWeeks = parseFloat(document.getElementById("leaveWeeks").value);
var publicHolidays = parseFloat(document.getElementById("publicHolidays").value);
var sickDays = parseFloat(document.getElementById("sickDays").value);
var hoursPerDay = parseFloat(document.getElementById("hoursPerDay").value);
// Validation
if (isNaN(permSalary) || permSalary <= 0) {
alert("Please enter a valid desired permanent salary.");
return;
}
if (isNaN(hoursPerDay) || hoursPerDay <= 0) {
alert("Please enter valid billable hours per day.");
return;
}
// Handle defaults for empty optional fields
if (isNaN(superRate)) superRate = 11.5;
if (isNaN(loadingPercent)) loadingPercent = 0;
if (isNaN(annualOverheads)) annualOverheads = 0;
if (isNaN(leaveWeeks)) leaveWeeks = 0;
if (isNaN(publicHolidays)) publicHolidays = 0;
if (isNaN(sickDays)) sickDays = 0;
// 2. Calculate Billable Time
// Total working days in a year (52 weeks * 5 days)
var totalWeekdays = 52 * 5;
// Deduct non-billable time
var leaveDays = leaveWeeks * 5;
var totalDeductions = leaveDays + publicHolidays + sickDays;
var billableDays = totalWeekdays – totalDeductions;
if (billableDays <= 0) {
alert("Your leave and holidays exceed the total working days in a year.");
return;
}
// 3. Calculate Financial Targets
// Base Salary + Superannuation
var superAmount = permSalary * (superRate / 100);
var baseTotal = permSalary + superAmount;
// Add Contractor Loading (Risk Premium) on the Base Total
// Loading covers lack of job security, no paid leave entitlements, etc.
var riskAmount = baseTotal * (loadingPercent / 100);
// Total Target Revenue Required (Net of GST)
var targetRevenue = baseTotal + riskAmount + annualOverheads;
// 4. Calculate Rates
var dailyRate = targetRevenue / billableDays;
var hourlyRate = dailyRate / hoursPerDay;
// GST Calculation (10% for Australia)
var dailyWithGST = dailyRate * 1.1;
var revenueWithGST = targetRevenue * 1.1;
// 5. Display Results
// Currency formatting
var fmtAUD = new Intl.NumberFormat('en-AU', { style: 'currency', currency: 'AUD' });
document.getElementById("resHourly").innerHTML = fmtAUD.format(hourlyRate);
document.getElementById("resDaily").innerHTML = fmtAUD.format(dailyRate);
document.getElementById("resDays").innerHTML = billableDays + " days";
document.getElementById("resRevenue").innerHTML = fmtAUD.format(targetRevenue);
document.getElementById("resGST").innerHTML = "Daily: " + fmtAUD.format(dailyWithGST);
// Show the result section
document.getElementById("results").style.display = "block";
}
Understanding Contractor Rates in Australia
Moving from a permanent employee role to contracting in Australia requires a significant shift in how you calculate your income. Unlike a permanent salary, a contractor's daily or hourly rate must account for the loss of paid leave, public holidays, sick leave, and job security. This Australian Contractor Rate Calculator helps you convert your desired permanent salary equivalent into a sustainable contracting rate.
The Formula: Why simple division doesn't work
A common mistake new contractors make is dividing their annual salary by 52 weeks or 260 days. This results in a rate that effectively pays you significantly less than a permanent employee. In Australia, a robust contractor rate calculation includes:
Superannuation: Currently 11.5% (rising to 12% by July 2025). As a contractor (especially Pty Ltd), you must often remit this yourself or have it deducted by a payroll company.
Unbillable Days: You do not get paid for Public Holidays (approx. 10-13 days in VIC/NSW/QLD), Annual Leave (20 days standard), or Sick Leave (10 days standard).
Risk Loading: A premium (typically 20% to 25%) added to compensate for the lack of notice periods, redundancy payouts, and general job insecurity.
Overheads: Costs such as Professional Indemnity and Public Liability insurance, accounting fees (Xero/MYOB), and hardware costs.
PAYG vs Pty Ltd
When contracting in Australia, you generally operate under one of two structures:
PAYG (Pay As You Go) via Recruitment Agency: The agency puts you on their payroll. They withhold tax and pay your Superannuation. Your quoted daily rate often includes Super but excludes agency fees.
Pty Ltd (Independent Contractor): You invoice the client or agency. You are responsible for your own withholding tax, BAS, GST, and Superannuation. The rates calculated above are generally the figure you would invoice (Ex. GST).
How to use this calculator
1. Desired Permanent Equivalent: Enter the base salary you would accept for a full-time permanent role (e.g., $130,000). 2. Contractor Risk Loading: We recommend leaving this at 20%. This ensures you are earning a premium for the volatility of contracting. 3. Billable Days: Adjust your planned leave. The average Australian contractor works approximately 220 to 230 days per year after accounting for weekends, public holidays, and 4 weeks of leave. 4. Result: The "Daily Rate" shown is what you should negotiate with recruiters or clients to maintain your desired lifestyle and financial security.