Contractor Hourly Rate Calculator Explained for Australians
Works out the hourly rate a contractor or freelancer needs to charge. This guide walks through what each input means, the formula behind the answer and a worked example using typical Australian figures. You can follow along in the free Contractor Hourly Rate Calculator.
Why it matters
Australian businesses deal with GST at 10%, BAS reporting, PAYG withholding for staff, super guarantee obligations and company or individual tax depending on structure. Getting pricing and margins right is the difference between busy and profitable.
What you need to enter
The calculator asks for 5 inputs. The table shows each one with the example value used later in this guide.
| Input | Example value |
|---|---|
| Target income ($) | 100000 |
| Super to fund yourself (%) | 12 |
| Annual business costs ($) | 10000 |
| Billable weeks per year | 46 |
| Billable hours per week | 30 |
The formula
Rate = (target income + super + business costs) ÷ (billable weeks × billable hours).
Worked example
Entering the example values above gives these results:
| Result | Value |
|---|---|
| Hourly rate (excl. GST) | $88.41 |
| Hourly rate incl. GST | $97.25 |
| Day rate (7.6 hours, excl. GST) | $671.88 |
The headline figure is $88.41 (hourly rate (excl. GST)). Change any input in the calculator and every result updates instantly, so you can test different scenarios side by side.
How the hourly rate (excl. GST) changes with target income
The table below keeps every other input at the example value and moves only “Target income ($)” up and down by 10% and 20%. It shows how sensitive the hourly rate (excl. GST) is to that one figure.
| Target income ($) | Hourly rate (excl. GST) |
|---|---|
| 80,000 | $72.17 |
| 90,000 | $80.29 |
| 100,000 | $88.41 |
| 110,000 | $96.52 |
| 120,000 | $104.64 |
At 80,000 the result is $72.17; at 120,000 it is $104.64. If a small change in this input moves the answer a lot, it is worth double-checking that figure before you rely on the result.
A practical tip
Allow for leave, sick days and quiet periods. Few contractors bill more than 46 weeks a year.
Keep going
Before relying on the number, read Contractor Hourly Rate Mistakes Australians Make and How to Avoid Them. You might also find these guides useful:
- How the Employee Cost Calculator Works (With a Worked Example)
- Discount Calculator: Formula, Example and What the Result Means
- Using a Depreciation Calculator in Australia: A Step-by-Step Guide
Frequently asked questions
- When do I need to register for GST?
- When your annual GST turnover reaches $75,000, or $150,000 for non-profits. Taxi and ride-share drivers must register regardless of turnover.
- What company tax rate applies?
- 25% for base rate entities with turnover under $50 million, and 30% for other companies.
- Should I talk to an accountant?
- Yes, for structure, tax planning and compliance. These calculators give quick estimates only.
Run your own numbers in the Contractor Hourly Rate Calculator.
Open the calculatorGeneral information only. Rates and thresholds change, usually on 1 July. Confirm current figures with the ATO or the relevant authority, and get personal advice for decisions about your situation.