What you want in your pocket after tax
Typically 25-35 hours (allow for admin time)
52 minus holidays, sick days, quiet periods
Hourly Rate (ex GST)
$95.22
$104.74 inc. GST
Day Rate (ex GST)
$723.67
$796.04 inc. GST
Gross Revenue
$131,406.25
Total Hours
1380/yr
How the rate is calculated
We work backwards from your desired take-home pay. Starting with your target net income, we add back income tax, Medicare levy, super contributions, and business expenses to determine the gross revenue you need. This is then divided by your billable hours to find your hourly rate.
Why billable hours matter
Not all working hours are billable. You need time for administration, marketing, invoicing, and professional development. Most freelancers find 25-35 billable hours per week realistic. Also account for holidays and quiet periods (typically 46-48 working weeks per year).
GST on your invoices
If you are registered for GST (required when turnover exceeds $75,000), you must add 10% GST to your invoices. This GST is not your income -- it is collected on behalf of the ATO and remitted via your BAS.
Setting aside superannuation
Unlike employees, freelancers must fund their own super contributions. While not compulsory, setting aside 12% ensures you match what employed workers receive and may be tax-deductible, reducing your taxable income.
ATO-Aligned: Uses 2025-26 tax rates. Day rate is based on a standard 7.6-hour working day (38-hour week / 5 days).
How to set, calculate, and negotiate your freelance rate to cover all costs and earn a fair income
How do you calculate a freelance rate?
Start with the annual salary you want to take home, then add the costs of running your business: superannuation (11.5%), insurance (A$1,000 to A$3,000), accounting fees (A$1,500 to A$3,000), equipment, software, and time off. Divide the total by your expected billable hours. Most freelancers bill about 1,000 to 1,400 hours per year. For a A$100,000 target income with A$30,000 in costs, that is about A$93 to A$130 per hour.
Why is a freelance rate higher than an equivalent salary?
Freelancers do not get paid leave, sick leave, super contributions, or employer-funded insurance. They also have unbillable hours spent on admin, invoicing, marketing, and finding new clients. A permanent employee on A$100,000 costs their employer about A$130,000 in total. A freelancer earning A$100,000 in fees actually takes home much less after tax, super, and business expenses. That is why freelance rates need to be 30% to 50% higher than equivalent salaries.
Do you need to charge GST as a freelancer?
If your annual turnover exceeds A$75,000, you must register for GST and add 10% to your invoices. If you earn less than A$75,000, GST registration is optional. When you charge GST, you collect it from clients and pass it to the ATO, minus GST credits on your business purchases. Your rate should be quoted exclusive of GST (for example, A$100 per hour plus GST). The GST is not your income — it belongs to the ATO.
What expenses can freelancers deduct?
You can deduct any expense directly related to earning your freelance income. Common deductions include home office costs (67 cents per hour fixed rate or actual costs), computer and equipment, software subscriptions, phone and internet, travel to client sites, professional development courses, insurance premiums, and accounting fees. These deductions reduce your taxable income. On A$100,000 gross income with A$15,000 in deductions, you only pay tax on A$85,000.
How should freelancers handle tax payments?
The ATO expects you to pay tax throughout the year via PAYG instalments, not as a lump sum. Set aside about 30% to 35% of every payment you receive into a separate bank account for tax, GST, and super. Lodge your BAS quarterly or monthly. If the ATO sends you a PAYG instalment notice, pay it on time to avoid interest. Many freelancers are caught off guard by their first tax bill because they did not save enough.
Should freelancers pay themselves super?
You are not legally required to pay yourself super as a sole trader, but it is strongly recommended. Contributions up to A$30,000 per year are tax-deductible, which can save significant tax. For example, contributing A$20,000 to super from your A$100,000 income means you only pay income tax on A$80,000. The super contribution is taxed at just 15% inside the fund. This is one of the best tax-saving strategies for freelancers.
How do you handle irregular income as a freelancer?
Build a cash buffer of at least 3 months of expenses. Invoice promptly and follow up on overdue payments. Set your rate to account for quiet periods — if you expect to be busy only 80% of the time, your rate needs to be 25% higher. Diversify your client base so you are not dependent on one source of income. Consider retainer agreements with key clients for a guaranteed minimum income each month.
ATO-Aligned: Based on 2024-25 ATO rates and thresholds. For personal advice, speak to a qualified tax agent.
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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