How it works
This converts between a contract day rate and an annual figure in two directions. Day rate to annual salary multiplies your rate by billable days, so gross = rate × days. Annual salary to day rate divides: required rate = salary ÷ billable days. Because billable days already leave out holidays and sick days, that division is what prices in the paid time off an employee gets for free. Take-home in both directions is gross minus income tax and minus the super or pension percentage.
Billable days is the lever most people get wrong. The default is 200, explained on the page as 50 weeks at 4 days. The tax preset dropdown fills the income tax field for you — New Zealand 30%, United Kingdom 32%, United States 24%, Australia 32.5% — or pick Custom and type your own, anywhere from 0 to 80% in half-point steps. Super/pension defaults to 3% and is deducted from gross alongside tax.
The tax figure is a single flat percentage applied to the whole gross, so it ignores progressive brackets, tax-free thresholds, deductible business expenses and GST or VAT; real take-home will differ. There is no separate leave field: holidays belong in the billable-days figure, and counting them in both places would overstate the rate. Amounts are printed in the selected country's currency symbol (NZ$, £, $ or A$), and Custom falls back to a plain $. Only the symbol changes; nothing is converted between currencies.
Frequently asked questions
How many billable days a year should a contractor assume? +
The tool defaults to 200, which it describes as 50 weeks at 4 days. Drop it toward 180 if you expect gaps between contracts or admin-heavy weeks, and raise it only if you have continuous work booked. The field accepts values from 1 to 365.
Why is the required day rate higher than salary divided by working days? +
Because it divides by billable days, not working days. An employee is paid across roughly 260 working days including holidays; at the default 200 billable days, a 100,000 salary needs 500 a day rather than about 385, covering the holidays, sick days and gaps a salaried employee is paid for and you are not.
Does the tax preset reflect my actual tax bill? +
No. The presets are single flat averages of roughly 30% for NZ, 32% UK, 24% US and 32.5% AU, applied to the whole gross. Real liability is progressive, varies by state or region and depends on deductions, so switch to Custom and enter your own effective rate.
Is KiwiSaver or 401(k) treated as a deduction here? +
Yes. The Super / pension percentage, 3% by default, is subtracted from gross alongside income tax to reach take-home. It represents money you set aside for retirement rather than money lost, so read that line as saving rather than as a cost.
What does take-home per billable day tell me? +
The bottom table row divides annual take-home by billable days, giving the cash you keep for each day actually worked. Compare it against an employee's daily net pay to see whether a day rate is genuinely ahead once tax and retirement contributions have come out.
Billable days are the number that matters
The conversion works from billable days per year, not from working days. The defaults assume something close to 200, against roughly 260 working days in a year — the gap is holiday, sickness, admin, business development and the weeks between contracts.
That gap is where naive conversions fail. Multiplying a day rate by 260 overstates annual income by nearly a third, and the error is invisible until a quiet quarter.
What a day rate has to cover that a salary did not
A salary is a net figure sitting on top of employer costs the employee never sees: pension contributions, the employer share of payroll taxes, paid leave, equipment, insurance and training. A day rate has to fund all of it, which is why an equivalent day rate looks high next to the daily value of the salary it replaces.
Insurance is the one most often forgotten and is frequently contractually required — professional indemnity and public liability both cost real money annually.
Comparing a contract rate to a salary honestly means adding those costs to the salary side, not just dividing.
