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Calculators and guides for Australian IT and data contractors: turn a day rate into take-home pay, compare Pty Ltd, PAYG and umbrella, and check whether the PSI rules apply to you
Agency PAYG and umbrella arrangements pay you as an employee. A sole trader invoices in their own name; a Pty Ltd invoices through a company. Personal services income (PSI) rules can apply to a sole trader or a company. If they apply to a sole trader, they restrict deductions. If they apply to a company, its net PSI is attributed to the individual who earned it in that income year, even if the cash stays in the company. Use the day rate calculator to compare the stated assumptions for each arrangement.
The rules apply when your income is mainly (more than half) a reward for your own skills and you don't meet a personal services business test. The results test (paid for a result, your own equipment, liable for defects) has to hold for at least 75% of your PSI to pass on its own. Where 80% or more of your PSI comes from one client and its associates, the other three tests can't be self-assessed. See our PSI rules guide for the full test.
You must register once your gross revenue reaches $75,000 a year. Below that it's optional. Day rates are quoted ex-GST by market convention rather than by law.
An agency or umbrella employer pays super guarantee on eligible employee earnings. A client may also owe super guarantee when it contracts directly with an individual mainly for that person's labour; having an ABN does not by itself remove that obligation. A sole trader does not pay super guarantee to themself. Payroll tax can apply to payments under relevant contractor agreements, subject to state rules and exemptions; an ABN or company is not an automatic exemption. See our super guide for the detail.
These tools are for general information only. They are not tax, legal or financial advice. For your own structure, PSI status or payroll tax position, confirm with the ATO, ASIC or a registered tax agent.