How to Calculate Your Contracting Rate in Australia: A Complete Guide for Freelancers and Fractional Talent

‍

The rise of the freelance and contracting economy in Australia has opened up new, flexible career paths for professionals at every stage of their working life. Whether you're a seasoned executive exploring fractional roles or a specialist moving into project-based work, one of the first questions you’ll face is: “What should I charge?”

Determining your contracting rate isn’t just about picking a number - it’s about understanding the full financial picture, factoring in benefits you no longer receive as a full-time employee, and pricing in both your value and your risk. This guide walks you through every step.

Step 1: Understand What’s in a Contracting Rate

Contracting rates typically appear higher than employee salaries because they need to account for:

• Superannuation
• Sick leave, annual leave, and public holidays
• Business expenses (e.g. software, internet, travel)
• Insurance (e.g. professional indemnity, public liability)
• Downtime between contracts
• Taxes (including GST if applicable)

You’re running a micro-business, and your rate needs to reflect that.

Step 2: Start With Your Employee Equivalent

A common way to calculate your base rate is to reverse-engineer it from your previous full-time salary. Here's how:

• Take your base salary + superannuation
• Divide by the number of working days in a year (typically ~230)
• Adjust for business expenses, risk, and benefits

Rather than do this manually, use this Contractor Pay Calculator from Paycal. It’s an excellent tool that lets you input your expected annual salary and get an equivalent hourly and daily contracting rate, inclusive of super, leave loading, and more.

Step 3: Adjust for Market Demand and Experience

Beyond the financials, factor in:

• Your seniority and specialisation: Highly sought-after skills (e.g. digital transformation, CFO advisory, brand strategy) command higher rates.
• Market benchmarks: Websites like Payscale and Seek’s salary guide offer useful data on market medians.
• Location: Remote roles may differ from metro-based contracts due to cost-of-living assumptions.
• Industry: Sectors like financial services and tech often offer higher day rates than NFPs or government roles.

Step 4: Decide on Hourly, Daily, or Project Rates

Most Australian contractors bill by:

• Daily rates (commonly 7.5–8 hour days): Ideal for mid-to-long term engagements.
• Hourly rates: Best for ad hoc consulting, coaching, or part-time advisory work.
• Project rates: Suited for deliverable-based work, e.g. building a new go-to-market strategy.

If using a daily rate, it's common to quote exclusive of GST (10%), which you'll need to add if you're registered for GST through your ABN.

Step 5: Set Up Your Business Properly

Before you start contracting, make sure you’re legally and financially prepared:

• Register for an ABN via the Australian Business Register.
• Consider GST registration if your income will exceed $75,000/year.
• Organise insurance: Many clients require contractors to hold Professional Indemnity, Public Liability, or Workers’ Comp.
• Superannuation: Set up a fund and factor this into your rate. Contractors must self-contribute unless otherwise agreed.
• Accounting: Use platforms like Rounded, Xero, or Hnry to manage income, taxes, and deductions.

Step 6: Review Annually

Just like salaried roles, your rate should grow with your experience, demand, and expertise. Review it at least annually and reprice accordingly, especially if your scope expands.

Pro Tip: Consider Risk-Based Pricing

If you’re solving high-impact or high-stakes problems - e.g. M&A advisory, brand repositioning, digital overhauls - price for value, not just time. Fixed-fee and outcome-based pricing is increasingly popular for senior consultants and executives.

Conclusion

Setting your rate as a contractor is as much a mindset shift as it is a financial calculation. With the right tools, market insight, and a clear view of your value, you’ll be in a strong position to price with confidence - and get paid what you're worth.

If you're exploring fractional or contract opportunities and want support on pricing or positioning, the Maestro team is here to help. We specialise in matching elite professionals with forward-thinking businesses - on your terms.