Contractor Pay Calculator
Contractors don't get paid leave — 48 leaves room for unpaid breaks.
Required once your ABN turnover passes $75,000/yr.
Tools, insurance, vehicle, phone — your deductible business running costs as a % of gross.
ABN contractors are not paid super by the payer — this shows what to set aside yourself.
Net take-home (annual)
$59,713
Effective tax rate
19.2%
Net take-home (monthly)
$4,976.08
Net take-home (weekly)
$1,148.33
$8,865 suggested super set-aside/yr — informational only, not paid by a client and not deducted above.
$8,208 GST collected/yr — owed to the ATO, not your income.
On a $45.00/hr rate working 38 hrs/week for 48 weeks, gross billings of $82,080 become $59,713 take-home after estimated expenses, income tax and the Medicare levy — an effective rate of 19.2%.
Quick answer
A contractor's take-home pay is gross billings (hourly rate × hours × weeks) minus deductible business expenses, income tax and the 2% Medicare levy. On a $45/hour rate for 38 hours a week over 48 weeks, gross billings of $82,080 become roughly $59,713 take-home — an effective tax rate near 19%.
Explore more Pay & Contractor calculators
Contractor Pay Calculator is one of pay, contractor and work tools on OneCalculate — see the full set for this category.
Browse Pay & ContractorHow it works
This contractor pay calculator (also useful as a general contractor payment calculator or contractor wage calculator) converts a quoted ABN hourly rate into what actually lands in your bank account once tax, the Medicare levy and your own running costs are accounted for. It assumes you’re a sole trader — the structure most independent contractors and freelancers use — taxed at ordinary individual marginal rates, not a company or trust.
The calculation runs in six steps:
Gross annual billings = Hourly rate × Hours per week × Weeks per year
Business expenses = Gross annual billings × Expenses %
Taxable income = Gross annual billings − Business expenses
Income tax = ATO individual marginal tax rates applied to taxable income
Medicare levy = Taxable income × 2%
Net take-home pay = Taxable income − Income tax − Medicare levyIncome tax is calculated using the ATO’s individual resident tax brackets for FY2026-27. The 2% Medicare levy is applied on top, per the ATO’s Medicare levy page. Two further figures are shown as information only, never subtracted from your take-home pay: a suggested super set-aside of 12% of taxable income, matching the Super Guarantee percentage an employer would otherwise pay on your behalf, and — if you’re GST-registered — the 10% GST you collect on invoices under how Australian GST works. GST collected is not your income; it’s money you hold for the ATO and remit via your Business Activity Statement, and super isn’t paid by anyone else, so both sit outside the net take-home figure as clearly labelled reminders rather than deductions. Use this same logic whether you think of it as a contractor salary calculator for comparing job offers or a straightforward contractor wage calculator for quoting new clients.
Worked example
Jordan is a freelance web developer working under her own ABN in Brisbane. She quotes clients $45 an hour and typically bills 38 hours a week, leaving room for admin and slow periods across 48 working weeks a year. Her deductible expenses — a laptop, software subscriptions, home office costs and an accountant — run around 10% of billings, and she’s GST-registered.
Her gross annual billings are $45 × 38 × 48 = $82,080. Deducting 10% expenses ($8,208) leaves a taxable income of $73,872. Applying the FY2026-27 tax brackets gives income tax of $12,681.60, plus a 2% Medicare levy of $1,477.44 — a combined effective tax rate of about 19.2%. That leaves Jordan with $59,712.96 net take-home for the year, or roughly $4,976 a month.
Separately, Jordan notes two numbers she doesn’t touch: a suggested $8,864.64 super set-aside (12% of her taxable income, since no employer pays it for her) and $8,208 in GST collected on her invoices, which she holds aside to pay the ATO on her next BAS.
| Amount | |
|---|---|
| Gross annual billings | $82,080 |
| Business expenses (10%) | $8,208 |
| Taxable income | $73,872 |
| Income tax + Medicare levy | $14,159.04 |
| Net take-home pay | $59,712.96 |
| Suggested super set-aside (informational) | $8,864.64 |
| GST collected (informational, owed to ATO) | $8,208 |
Frequently asked questions
How do I calculate my take-home pay as a contractor in Australia?
Multiply your hourly rate by hours worked per week and weeks worked per year for gross billings, subtract deductible business expenses to get taxable income, then subtract income tax and the 2% Medicare levy. What's left is your net take-home pay as a sole trader on an ABN.
Do I pay myself superannuation as a sole trader contractor?
No payer is required to pay super to a genuine ABN contractor, so it isn't deducted from your take-home pay automatically. It's strongly recommended you set aside roughly 12% of taxable income yourself into a personal or SMSF super account, since nobody else will do it for you.
Is the GST I collect on invoices part of my income?
No. If you're GST-registered, the 10% GST you add to invoices belongs to the ATO, not you — you collect it on the government's behalf and remit it, usually quarterly via your BAS. Treat it as a pass-through, not extra take-home pay.
How much tax should I set aside as a contractor?
As a rough rule of thumb, set aside 20–30% of your taxable income (billings minus expenses) for income tax and the Medicare levy, more if you're a high earner. Our calculator shows your exact effective tax rate based on current ATO brackets for your numbers.
What's the real difference between a contractor's rate and an equivalent employee salary?
A contractor's quoted rate has to cover what an employer would otherwise pay for on top of salary — 12% super, paid leave, sick leave and public holidays — plus the contractor's own business expenses and insurance. That's why a fair contractor rate is typically well above an equivalent hourly employee wage.
Do I need to register for GST as a contractor?
You must register for GST once your ABN turnover reaches or is expected to reach $75,000 in a 12-month period; below that it's optional. Once registered, you charge 10% GST on top of your invoices and lodge a Business Activity Statement, usually quarterly.
Does this calculator work for company or trust structures?
No — it assumes you're operating as a sole trader taxed at individual marginal rates on an ABN, which is how most independent contractors work. If you trade through a company or trust, your tax treatment is different and this tool won't give an accurate figure.
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Written and verified by Nirbhay Tripathi
Last updated 18 August 2026
All rates on this page are verified againstATO — Tax rates, Australian residents, ATO — Medicare levy, ATO — How Australian GST works, ATO — Super guarantee percentageon 18 August 2026. See our methodology for the full update calendar.