Contractor vs Employee at $60k: Which Pays More?
Earning $60k puts you in the 30% marginal bracket with a marginal rate of 30% for 2025–26. As an employee, your employer handles PAYG withholding, super guarantee (11.5%), and payroll tax — but you have limited deductions. As a contractor invoicing at roughly $250/day, you can claim legitimate business expenses ($6,000+ for home office, equipment, and professional development), but you're responsible for your own super, insurance, and leave entitlements.
At this income you're below the $75,000 GST registration threshold, so GST registration is optional — though voluntary registration can let you claim GST credits on business expenses. The comparison below models both scenarios with identical gross income so you can see exactly where the money goes — tax, super, GST obligations, and deductible expenses — and what lands in your pocket after everything is accounted for.
Decision read
The alternate setup reduces take-home pay in a noticeable way.
This may still be worth it, but the non-cash benefits need to outweigh the drop in annual cash.
Baseline
Employee
Alternate
Contractor
Result
$50,012.00Employee
Annual gross$60,000.00
Income tax + levies$9,988.00
HELP repayment$0.00
Take-home pay$50,012.00
Monthly cash flow: $4,167.67
Effective rate: 16.6%
This scenario is using the cleaner baseline settings with no HELP debt, no bonus, and no salary sacrifice.
Result
$41,036.00Contractor
Contract income$60,000.00
Take-home pay$41,036.00
Employee equivalent take-home$45,640.57
GST + business costs$6,000.00
Monthly cash flow: $3,419.67
Effective rate: 31.6%
As an employee, you'd take home $4,604.57 more per year.
Your voluntary super contribution of $7,200.00 is tax deductible.
Your business expenses save approximately $738.97 in tax.
Why the result moves
Compare the cash outcome, then inspect the structural reason
Contractor changes annual take-home by -$8,976.00 compared with Employee.
Contractor changes tax and levy outflow by -$4,224.00.
This is a structural comparison, not a pure tax-rate change. GST, expenses, and self-funded super all matter.
Frequently asked questions
How much take-home pay does a $60k contractor keep compared to an employee?
It depends on deductible expenses and super strategy. At $60k a contractor charging $250/day can typically claim $6,000+ in deductions, which lowers taxable income. However, contractors must self-fund super (11.5%), leave, and insurance. Use the calculator above to see the exact net comparison for your situation.
Do I need to register for GST as a contractor earning $60k?
Not necessarily. GST registration is compulsory only when annual turnover reaches $75,000. At $60k you're below the threshold, but voluntary registration lets you claim input tax credits on business expenses like equipment and software.
Should I salary sacrifice or go contractor at $60k?
At $60k (in the 30% marginal bracket), salary sacrifice into super is taxed at just 15% instead of 30% — an immediate saving on every dollar sacrificed up to the $30,000 concessional cap. Contracting offers broader deductions but carries more admin burden and risk. Compare both options in the calculator to see which works better for your goals.
Want the full picture?
Read our in-depth guide to understand the methodology, edge cases, and planning strategies behind this comparison.
Read the guide →