Work types
Contractor vs Employee In Australia
Short answer
Employees receive 12% super, paid leave and unfair dismissal protection. Contractors set their own rate but self-fund super, leave, insurance and downtime, so matching a $110,000 salary usually needs a materially higher day rate once those costs are added. Labelling an employee a contractor to avoid entitlements is unlawful sham contracting.
What a contractor must self-fund
12% super (in many cases), annual and sick leave, public holidays, insurance, equipment, admin and unbilled time between contracts. The contractor calculator works out the day rate needed to match a salary.
Sham contracting
An ABN alone does not make someone a contractor. Whether you are an employee or contractor depends on the working relationship. Misclassifying employees as contractors can breach the law - check Fair Work and the ATO.
Frequently asked questions
Do contractors get super?+
Sometimes - a business may need to pay super for a contractor mostly paid for their labour. Check ATO guidance.
What rate matches a $100k salary?+
Usually well above $100k/260 once super, leave, insurance and downtime are funded - use the calculator.
Is having an ABN enough?+
No. The nature of the work relationship determines your status, not the ABN.
Sources & methodology
- ATO - Personal income tax: new tax cuts (15% rate from 1 July 2026)
- Income Tax Rates Act 1986 (legislation.gov.au)
- ATO - Study and training loan repayment thresholds and rates
- ATO - Super guarantee
- ATO - Contribution caps
- ATO - Payday Super and the annual maximum contribution base
- ATO - Medicare levy
- ATO - Medicare levy surcharge income thresholds and rates
- Fair Work Ombudsman - Pay slips
- How we calculate these estimates
Last updated 13 August 2026. Figures use the 2026-27 financial year.
Related calculators & guides
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