ABN & Sole Trader Tax Calculator for Contractors
Estimate contractor income after tax, GST, and super.
Convert day rates or hourly rates into an annual income estimate, then layer in expenses, tax, GST pressure and self-funded super.
Contractor income
Rate
Rate type
Use the headline daily rate before expenses and tax.
Working pattern
Expenses
Insurance, accounting, software, equipment, travel and similar business costs.
Contractor Income Estimate
Net after tax and super
$115,430
Gross business income after expenses: $206,500
$502 / day effective rate
- Annual billings
- $218,500
- Net after tax
- $140,210
- Tax + Medicare
- $66,291
- Suggested super
- $24,780
- Effective daily rate
- $502
- Effective hourly rate
- $66
- Projected income is above the $75,000 threshold — you may need to register for GST and factor BAS reporting into your cash flow.
Tax and take-home breakdown
- Business income after expenses
- $206,500
- Income tax
- -$59,063
- Medicare levy
- -$4,130
- Suggested super contribution
- -$24,780
- Effective daily rate after tax + super
- $502
- Effective hourly rate after tax + super
- $66
Compare to a PAYG employee
See how your net income stacks up on a regular salary.
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How the Contractor Calculator Works
Why Use an ABN Tax Calculator?
A $750/day contract rate sounds like a huge salary — but after accounting for non-billable weeks, business expenses, self-funded super, and the GST threshold, the take-home reality is often very different from the headline number. This ABN tax calculator converts your contract rate into an honest annual picture so you can compare contract vs salary offers after tax or plan your cash flow as a sole trader. It works as both a sole trader tax calculator and a freelance tax calculator for Australian contractors.
How It Works
- Select hourly or daily rate: Pick the contract rate basis that matches your engagement.
- Enter billable time: Set the days or hours per week and the number of working weeks across the year. This is where most overestimates happen — be realistic.
- Subtract annual expenses: Include recurring costs like insurance, software, accounting fees, and coworking space.
- Review the full picture: See your gross business income, estimated tax, GST registration threshold, and suggested self-funded super contribution.
Key Contractor Concepts
Billable Utilisation
The percentage of the year you actually bill clients. Leave, gaps between contracts, and admin time reduce this. Most contractors bill 42–46 weeks per year.
GST Threshold ($75,000)
Once annual turnover exceeds $75,000 you must register for GST, charge 10% on invoices, lodge BAS quarterly, and manage GST credits on expenses.
Self-Funded Super
Unlike employees, contractors don't receive employer super. The tool suggests 12% of gross income so you can compare like-for-like against salaried packages.
Expense Deductions
Business expenses reduce your taxable income directly. Common items include insurance, accounting fees, equipment, software subscriptions, and travel.
Example: $750/day, 46 billable weeks
A contractor working 5 days per week for 46 weeks with $8,000 in annual business expenses:
Income breakdown
- Gross billings (230 days):$172,500
- Business expenses:-$8,000
- Taxable income:$164,500
Tax and super
- Estimated tax (inc. Medicare & MLS):$47,961
- Suggested super (12%):$19,740
- Take-home (after tax):$116,540
GST registration required — projected turnover exceeds the $75,000 threshold. After self-funding super of $19,740, take-home lands at $96,800 — run your own numbers against a salary offer with the compare tool.
Example only. Enter your own figures in the calculator above.
ABN contractor vs PAYG employee — what actually differs
Income tax rates are identical for sole traders and employees — what changes is everything around them. This is the structural comparison behind the calculator's suggested-super and billable-weeks inputs:
| ABN contractor | PAYG employee | |
|---|---|---|
| Income tax | Same individual rates; you set money aside yourself and pay via instalments or at lodgement | Same rates, withheld from each pay automatically |
| Super | Self-funded — the tool suggests 12% of gross | Employer-paid at 12% on top of salary |
| Paid leave | None — unbillable weeks are unpaid (hence the billable-weeks input) | 4 weeks annual leave plus sick leave and public holidays |
| GST & BAS | Register over $75,000 turnover, charge 10%, lodge BAS | Not applicable |
| Expenses | Business costs (insurance, software, equipment) deductible but paid by you | Mostly employer-provided; limited work-related deductions |
Billable time is the biggest lever
Contractors rarely bill every week of the year. Leave, downtime between contracts and non-billable admin work all reduce the annualised value of a headline day rate — which is why salaried roles need a much lower headline number to match the same after-tax, after-super position.
Simplified estimate only
This is not an accounting model. It does not include GST credits, company tax, trust structures, payroll tax, workers compensation or professional-indemnity complexity.
Frequently Asked Questions
How is gross contractor income calculated here?
The calculator annualises your daily or hourly contract rate, multiplies it by billable time, and then subtracts the annual expenses you enter. That result is treated as the business income flowing into the tax estimate.
Does this include GST?
It does not add GST on top of your contract rate. Instead, it flags when projected income is above the $75,000 threshold so you can account for GST registration and BAS obligations separately.
Do sole traders pay 30% tax?
No — there is no flat rate. Sole traders pay the same progressive individual rates as employees: for 2025-26 the rates step from 0% below the tax-free threshold up to 45% at the top, plus the Medicare levy. The "30%" figure people quote is the 30% middle bracket's marginal rate, which only applies to the income falling inside that bracket — not to your whole income. (The 25–30% company tax rates are different again, and only apply if you incorporate.)
Do I need an ABN if I earn less than $75,000?
Usually yes, if you're running a business — the ABN requirement is separate from the GST threshold. Without an ABN, clients are required to withhold tax from your invoices at the top marginal rate plus the Medicare levy, and you can't register a business name or claim GST credits. What the $75,000 turnover threshold controls is compulsory GST registration: below it you can hold an ABN without registering for GST; above it you must register, charge 10%, and lodge BAS.
Why does the calculator suggest super?
Employees receive employer super contributions automatically, but many contractors need to self-fund that themselves. The tool shows a suggested contribution at 12% of gross income so you can compare contract income with salaried packages more realistically.
Are the tax figures the same as for an employee?
The estimate reuses the site's PAYG-style personal tax engine for a quick benchmark. It does not model company structures, PSI rules, GST credits or business-specific deductions beyond the annual expense figure you enter.
What is a realistic billable utilisation rate?
Most independent contractors bill 42–46 weeks per year after accounting for annual leave, sick days, public holidays, and gaps between contracts. Assuming 52 billable weeks will significantly overstate your annual income. Start with 44 weeks as a reasonable baseline and adjust from there.
Should I set up a company or stay sole trader?
This calculator estimates income as a sole trader (ABN holder). Company structures can offer tax advantages at higher income levels but come with additional compliance costs (ASIC fees, company tax returns, director obligations). Consult an accountant to compare the options for your specific situation.
How do I convert a contract day rate to an equivalent salary?
Multiply your daily rate by the number of billable days per year (e.g., $750/day across 230 billable days is $172,500 gross). Then subtract business expenses, self-funded super (12%), and account for the fact that salaried roles include paid leave and employer super on top. This contract to salary converter does that comparison automatically.
How much tax does a sole trader pay in Australia?
Sole traders pay the same individual income tax rates as employees — the 2025-26 progressive PAYG brackets apply. The difference is that no employer withholds tax from each pay, so sole traders must set aside tax themselves and pay through BAS or tax return. Use this sole trader tax calculator to estimate your liability based on your contract income minus expenses.
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