Contractor vs Employee: Sydney 2026 — Net Income Calculator
See whether going independent actually pays more after tax, social security, and business overheads.
As an Employee
As a Contractor / Freelancer
Enter your rate as if you worked 52 weeks — we'll adjust for time off below.
e.g. 4 weeks off = 4
Going contractor in Sydney puts $11,023 more in your pocket per year.
| Metric | Employee | Contractor |
|---|---|---|
| Annual Revenue / Gross Salary | $90,000 | $120,000 |
| Unbilled Weeks Adjustment | — | $9,231 |
| Actual Gross Income | $90,000 | $110,769 |
| Business Overheads | — | $4,700 |
| Taxable Income | $90,000 | $106,069 |
| Social Security | $1,800 | $2,121 |
| Income Tax | $14,250 | $18,974 |
| Effective Tax Rate | 17.8% | 19.9% |
| Net Annual Income | $73,950 | $84,973 |
| Net Monthly Income | $6,163 | $7,081 |
To match your employee take-home of $73,950/year, you need to invoice at least $85,204/year as a contractor in Sydney.
That's roughly $1,639/week or $328/day.
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Frequently Asked Questions
Is it worth going contractor in Sydney?
Yes — at a revenue of $120,000/year, a contractor in Sydney takes home $84,973/year (effective rate: 19.9%), compared to $73,950/year as an employee (effective rate: 17.8%).
What contractor rate do I need to match my employee salary in Sydney?
To match an employee take-home of $73,950/year in Sydney, you need to invoice at least $85,204/year as a contractor — roughly $1,639/week or $328/day.
How this calculator works
This calculator compares the net income of a contractor (B2B / freelance) against an employee earning the same gross amount. It applies each country's corporate and personal tax rules, social security, and estimates the break-even invoicing rate a contractor needs to match an employee's take-home pay.
What's included
- Employee income tax and social security
- Contractor / B2B corporate tax and distributions
- Break-even contractor day rate
- Effective tax rate comparison
What's not included
- IR35 / deemed employment rules (UK-specific)
- VAT registration and reclaim
- Business expenses or deductions
- Employer pension contributions
Data sources: Official tax authority publications for each jurisdiction: HMRC (UK), IRS (US), Autoridade Tributária (PT), KVK/Belastingdienst (NL), IRAS (SG). Updated for 2025/26.