Contractor Rate Calculator
Charging an old salary divided by 2,000 hours is how contractors go broke. Work backwards from the income you actually want — after super, expenses, leave and the hours you can't bill — to the rate you need to quote.
What you want to pay yourself, before personal income tax. Tax is separate — set this to your desired pre-tax income.
Holidays + public holidays + typical sick days. Bump this up if you also want a buffer for downtime between contracts.
Share of working hours you can actually bill. The rest goes on quoting, admin, marketing and chasing invoices. 60–80% is realistic.
As a contractor you fund your own super. 12% matches the employee Super Guarantee. Set to 0 to exclude.
- Target income
- $90,000.00
- Super (12%)
- $10,800.00
- Business expenses
- $12,000.00
- Total to bill per year
- $112,800.00
Rates include 10% GST. Ex-GST hourly: $82.46.
How this is calculated
The rate you need to charge is your total annual billings divided by the hours you can actually bill — not the hours you work. The two are very different once you account for quoting, admin, marketing and chasing invoices.
- Total billings = target income + self-funded super + business expenses. This is what your invoices have to add up to across the year.
- Billable hours = (52 − weeks off) × hours per week × billable utilisation. At 75% utilisation, a quarter of every working week earns nothing — it has to be priced into the other three-quarters.
- Super: unlike an employee, no one pays your super for you. Setting aside 12% (the Super Guarantee rate from 1 July 2025) keeps your retirement on par with a salaried role.
- GST: if you're registered, your rate is quoted inclusive of 10% GST which you remit to the ATO — it isn't income. The ex-GST figure is what actually reaches your business.
Target income is before personal income tax. Set it to the pre-tax income you want to draw; your own marginal tax is separate and depends on your structure. This tool sizes the rate to the income, not the other way around.