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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
It depends on your contract length, whether the personal services income (PSI) rules apply to you, and how much admin you want to carry. Agency PAYG and umbrella need the least admin but cost a fee or a cut already built into the rate. Sole trader suits short or side contracts where the PSI rules don't apply. Your own Pty Ltd is the only correct structure once the PSI rules do apply, because retaining profit in the company is a tax deferral rather than a saving. Use the day rate calculator to compare take-home pay across all four.
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.
Under agency PAYG and umbrella, the firm placing you is your super guarantee employer and carries payroll tax on your wage as its own cost (5.45% in NSW above the threshold, varying by state). Under sole trader, no one pays you super: personal contributions are your own deductible choice. Under your own Pty Ltd, the company must pay at least the 12% guarantee rate on the salary it pays you as its director. See our super for contractors 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.