Question 1

How is contractor pay calculated?

Accepted Answer

Contractor pay is calculated by annualising your rate based on hours per day and work weeks per year, then applying standard income tax brackets, Medicare levy, and super. If your rate includes GST, the GST component (10%) is removed before tax calculations.

Question 2

Should I include GST in my rate?

Accepted Answer

If you are registered for GST (required for businesses earning over $75,000), your invoiced rate likely includes GST. Toggle "Rate includes GST" to see your income after GST is removed. GST is not income — it is collected on behalf of the ATO.

Question 3

How many work weeks should I use?

Accepted Answer

Most contractors use 48 weeks per year, accounting for 4 weeks of unpaid leave. If you work year-round with no breaks, use 52. Remember contractors typically do not receive paid annual or sick leave.

Question 4

Do contractors pay superannuation?

Accepted Answer

If you are an independent contractor paid wholly or principally for your labour, your client may need to pay super. If you run your own business, you can choose to pay super to yourself. The calculator shows the super amount based on the rate you set.

	Weekly	Fortnightly	Monthly	Annual
Gross Income	$1,846	$3,692	$8,000	$96,000
Superannuation	$222	$443	$960	$11,520
Income Tax	-$372	-$743	-$1,610	-$19,320
Medicare Levy	-$37	-$74	-$160	-$1,920
Total Tax	-$408	-$817	-$1,770	-$21,240
Take-Home Pay	$1,438	$2,875	$6,230	$74,760

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Understanding Contractor Tax in Australia

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