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Tools - Day Rate vs Salary
A rate and a salary are not comparable numbers, and the arithmetic people do in their heads is almost always wrong in the contract's favour. It multiplies by 260 days nobody works and quietly drops superannuation, leave and the weeks between contracts. This does it properly, in both directions.
Nothing you enter is uploaded. This is worked out on the page by JavaScript running on your own machine. The figures are Australian: superannuation on top of base, and leave under the National Employment Standards. Every assumption below is an input, because the two that matter most, your billable days and your time on the bench, are things only you can estimate.
The two offers
Days you will actually bill
There are 260 weekdays in a year and you will not bill all of them. A permanent employee is paid for all of these; a contractor is paid for none.
On an equivalent-base comparison
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The contract
The permanent role
In neither figure
Copied. It is plain text, so it will paste anywhere.
Worth knowing what the permanent side of that comparison should actually be paying. The band for your role takes about ten seconds.
Check the band →How it works
Take a rate of 900 dollars a day. Multiplied by 260 weekdays that reads as a 234,000 salary, which is how it gets compared against a permanent offer. Both halves of that are wrong.
You will not bill 260 days. Take off 20 days of annual leave, roughly 11 public holidays and a handful of sick days and you are at 224. Take off four weeks between contracts, which is a modest assumption in a normal year, and you are at 204. That alone drops the same rate to 184,000.
Then there is superannuation. A permanent base of 180,000 is a package of 201,600, because super is paid on top. If your rate does not include super, it has to fund it out of the same money, so the equivalent base is what is left after dividing by 1.12. The 900-a-day rate lands at about 164,000 as a comparable base, not 234,000.
That is a seventy-thousand-dollar difference in the same offer, and it comes entirely from arithmetic nobody does in their head. It is also why the calculator asks for your bench weeks rather than assuming a number: no published figure for it would be honest, and it moves the answer more than anything else here.
Leave is counted once, on the contract side, as days you cannot bill. It is deliberately not added to the permanent side as a bonus, because a salary already includes it. Counting it twice is the most common way these comparisons get quietly rigged.
The four things listed under "in neither figure" stay out on purpose. Notice, redundancy, parental leave and the cost of running your own entity are real and they are not money we can put a number on for you. A calculator that invented one would be making your decision with a made-up input.
Once you have the equivalent base, check it against what the role actually pays with the salary checker, or against your own pay with am I underpaid.
Common questions
Multiply the rate by the days you will actually bill, not by 260. A full-time employee is paid for about 36 days a year they do not work: 20 days annual leave, roughly 11 public holidays and their sick days. A contractor is paid for none of those, and also loses the weeks between contracts. Then, unless superannuation is paid on top of the rate, the remaining figure has to fund super as well, so divide by 1.12 to get the equivalent base salary.
On 204 billable days, which is 260 weekdays less 20 days leave, 11 public holidays, 5 sick days and 4 weeks between contracts, a 180,000 base with 12 per cent superannuation works out at roughly 990 dollars a day if super is not paid on top of the rate, or about 880 dollars a day if it is. Change any of those assumptions and the answer moves, which is why they are all inputs.
Often yes on cash, but by less than the headline rate suggests, and the gap narrows sharply if you spend time on the bench. A rate that looks like a 234,000 salary against 260 weekdays is worth closer to 164,000 as an equivalent base once real billable days and superannuation are counted. Whether the remaining premium is worth losing notice, redundancy and paid parental leave is a judgement this calculator does not make for you.
It depends how the engagement is structured. PAYG contracts through an agency usually pay superannuation on top of the quoted rate. An engagement through your own company or ABN usually does not, in which case the rate has to fund it. It is worth about 12 per cent, so it is the single most important thing to confirm in writing before comparing two rates.