Have you ever found yourself in the position of working off an ABN and wondering whether or not you’d be better off taking up a salary position on offer?
Or maybe you’ve been working for a company as a full-time or casual and need to know how much you’d need to charge if you wanted to go out on your own and start contracting…
If you’re like many of us in the trade or service business, you’ve probably worked for companies who pay you in a variety of different ways.
On the other hand, if you’re a business owner you most likely employ staff on a variety of different structures from salary, to casual or sub-contracting.
Whilst every circumstance is different and you should by no means use this as gospel, you can use this simple calculator to instantly see how hourly rates on a salary measure up against hourly rates working casually or on an ABN.
With different pay structures in place from working off an ABN, to “full time casual” and annual salaries on offer, it can be hard to easily figure out which is the better deal.
Annual Salary to ABN contracting
If you are thinking about flipping the bird to your employer and going out on your own, you’ll want to know the bare minimum of what you’ll need to be making as a contractor to measure up with your previous salary or casual rate.
Here is an example of what you might expect – keep in mind that this is a rough guide only and expenses may vary.
Assuming you will still get approximately 40 hours per week in on the tools, you’ll require an income of at least $48.83 per hour to replace your $65,000 salary or $39.06/hour casual rate.
In this example, Jim is making $65,000 + super per year working on a salary for Jake’s mowing.
He thinks “Jim’s Mowing” has a better ring to it and wants to go out on his own, but doesn’t know what he’ll need to make per hour to equal or exceed his current annual salary.
By entering his salary into the Boss Tradie –“Subby to Salary Calculator” he can see that he will need to bring in at least $48.83 per hour to be better off; assuming he can still get roughly 40 hour weeks and do it without any advertising costs.
ABN to Annual Salary Example
In this example, Rex has had enough of the headaches of dealing with multiple contractors and waiting to get paid and wants to know if he should take a salary offer of $75k for another business.
Given that he currently earns $60/per hour working on an ABN, he may need closer to $80K per year to equal his current paycheque, although he may also factor in things such as the hours and stress into his decision.
If he has done last year’s tax return and the current year is shaping up about the same, it’s probably best to just cheque his taxable income from the previous financial.
Subby to Salary Summary
Whether you are an employer looking to contract out work and wondering how much you can offer subbies, or a contractor who is trying to figure out if you will be better off on a salary, this calculator will help.
Watch the video to learn how to use the “Subby to Salary” calculator and instantly get a ballpark estimate of how Salary hourly rates measure up against casual or ABN contracting.
Disclaimer: This is not Financial Advice.