Annual Contract Value
$192,000.00
Contractor Net
$105,392.00
Employee Net
$135,622.00
Difference
-$30,230.00
GST Collected
$19,200.00
| Contractor | Employee | |
|---|---|---|
| Gross Income | $192,000.00 | $192,000.00 |
| GST Collected | $19,200.00 | N/A |
| Business Expenses | -$15,000.00 | N/A |
| Taxable Income | $177,000.00 | $192,000.00 |
| Income Tax | -$46,828.00 | -$52,538.00 |
| Medicare Levy | -$3,540.00 | -$3,840.00 |
| Superannuation | -$21,240.00 (self-funded) | +$23,040.00 (employer) |
| Net Take-Home Pay | $105,392.00 | $135,622.00 |
Contractor vs Employee
Contractors earn a gross amount and pay their own tax, super (optional but recommended), and must charge and remit GST if registered. Employees receive a salary with employer-paid super (12% SG) and PAYG tax withheld by the employer.
Key Differences
Employees receive paid leave (annual, sick, long service), workers' compensation coverage, and employer super contributions. Contractors can claim business deductions but must fund their own leave, insurance, and superannuation.
GST Considerations
If your annual turnover exceeds $75,000, you must register for GST and charge 10% on invoices. GST collected is remitted to the ATO, so it is not income. You can claim GST credits on business purchases.
Business Expense Deductions
Contractors can claim tax deductions for legitimate business expenses including equipment, software, insurance, accounting fees, and a portion of home office costs. These deductions reduce your taxable income, lowering your overall tax liability.
ATO-Aligned: Uses 2025-26 tax rates. This is a guide only -- consider seeking professional advice for your specific circumstances.
Disclaimer: This calculator provides estimates based on current ATO rates and thresholds for the 2024–25 financial year. It does not constitute professional tax, financial, or legal advice. Your actual liability may differ depending on your individual circumstances. Always consult a qualified tax agent before making financial decisions. Read our terms
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