How to Calculate an Annual Salary Based on a Daily Rate?

Llooseygoosey on 24/10/2022 - 10:53

How much would I see in my bank account each month based on a daily contracting rate of $500 p/day?

For context, I work in HR and have a salary package of $100000 (inc super). The money that comes into my account each month is roughly $5700.

I've been looking at contracting roles that are $500 p/d. When I put this into paycalculator.com.au, it's saying the monthly income is $7213 p/month - is that what I'd see in my bank account each month?

I feel silly asking this question but scared to ask others.

Financial

Comments

  • CyberMurning on 24/10/2022 - 10:54
    +12

    well depending on the tax ?

    • HeWhoKnows on 25/10/2022 - 20:19
      +38

      OP is in HR being paid a squllion and doesnt understand simple arithmetic and tax?

      What has happened to education in Australia?

      • MrFrugalSpend on 26/10/2022 - 00:37
        +9

        What, you wouldn't expect an average person to understand about their salary / income tax / withholding tables - you'd have to ask someone in the HR department…. oh, wait.

        PS $100K incl super is NOT a "squillion" in Melbourne/Sydney 2022 for a full-time employee…. slightly above average maybe (?)
        There's this little thing called inflation…

        • Wiede on 26/10/2022 - 06:43
          +1

          Which is why OP turned to anonymous forum. Because they will be judged if they asked irl.

        • supersabroso on 26/10/2022 - 19:35
          +3

          Exactly, $100k is smack bang in the middle of the average male salary between the private and public sector. It's a standard run off the mill full time salary for the average Joe.

          • conza on 26/10/2022 - 22:57

            @supersabroso: $81,500 is the median income according to the abs, using data from May 2021, then using the pay calculator to reverse engineer a weekly amount.

            https://www.abs.gov.au/statistics/labour/earnings-and-workin…

            https://paycalculator.com.au/

            On the pay calculator page for 2019 the "50th percentile" was right at $60k, it's probably gone up so maybe $70k would be right in the middle of median, this is excluding the super high earners which would distort the average.

            • MrFrugalSpend on 28/10/2022 - 08:39

              @conza: On your link:

              "For males were $2,075.30 (public), and $1,835.60 (private)"

              Don't have to reverse engineer just x 52 = $107,915.60 and $95,430 exacltly like supersabroso said.
              This was "total earnings" i.e. incl super etc. Also consider it'd be higher in syd/mel with higher costs as I originally said.

              • conza on 28/10/2022 - 12:06

                @MrFrugalSpend: Exactly my point, that's an average, median is far lower, this number is including the super high earners.

                ~$100k is the "average" but the median is a better indicator as it's excluding CEOs, specialist medical professionals, blah blah blah.

      • Serapis on 27/10/2022 - 11:10

        That's why HR and payroll are usually seperate departments…

  • DemocracyManifest on 24/10/2022 - 10:55
    +3

    Have you taken tax into consideration? And is super inclusive in that amount?

    • looseygoosey on 24/10/2022 - 10:58
      -1

      Tax: i don't know - can you clarify? I want to know what's the final figure i see in my nominated bank account each month
      Super: yep, $500 inc super

      [edit] for arguments sake, let's say it's $500 inc tax and super, and $500 inc super but not tax

      • Donaldhump on 25/10/2022 - 00:32
        +6

        Pay calculator online

      • Brianqpr on 25/10/2022 - 09:40

        So net of super $500 would become about $454 which works out to approx $118k per year pre tax pay. An online tax calculator would give you what that works out as for net take home pay.

        As others have said, if its a contract then you might not be entitled to sick or annual leave. This of course has a value but will be different for different people.

      • Zonty on 25/10/2022 - 22:55
        +1

        Ask pay slip lol
        There will be all how much gross and tax and net.
        Who make you work in HR. When you can not figure out this much.
        All employer liable to provide pay slip. Or labour pay invoice.
        This forum most likely bull ****.

      • haritone on 26/10/2022 - 21:48
        +1

        Rule of thumb for contracting: 220 * Day Rate.

        Day rate is quoted including super i.e. your $500pd is $452.50 + super.

        Assuming your PAYG is managed by others you would expect to be slightly ahead compared to your $100k total remuneration.

        If you manage your tax obligations then there’s opportunity to do more.

        • mousie on 26/10/2022 - 22:00

          200
          as if contracting assume.. churn every 6 months

    • bad hombre on 25/10/2022 - 08:51
      +3

      Need to consider the following:

      Your 100k inc. super would have included annual leave of 4 weeks and public holidays of 2 weeks.

      500p/d (assuming inc. of super) would be the equivalent of 115k. As you won't get paid for public holidays and most offices have a 2 week Christmas shut and most people take time off during the year or eventually have a holiday at some point or may get sick but these days can manage that by working from home. Most employers provide some flexibility with days off due to peaks in workload.

      Don't forget with contracting you get paid more due to risk, i.e. no redundancy (redundancy kicks in after 12m though) or long service (need to wait 10 years to collect this) so this forms part of your rate if you want to think of it like that.

      • Chandler on 25/10/2022 - 17:43

        Also training, certification, regulatory compliance, insurance, taxation, ……

  • tephra on 24/10/2022 - 10:58
    +10

    I always use this:

    http://www.users.on.net/~wallala/Calculators/salary_rate.htm

    • strombo on 29/08/2023 - 16:51

      Do you know if there is a new hosting service for the salary rate web page?
      The Internode Members Webspace service has reached End of Life has closed, and Internode provided no redirection service

  • Mr Haj on 24/10/2022 - 10:59
    +10

    Apparently there are 248 working days in Victoria. So $500 per day would pay you $124,000 before tax. Then you would need to make allowances for super, holidays, sick leave etc.

    • Quantumcat on 24/10/2022 - 11:03
      +8

      Yes taking on a contracting role is risky - you can lose your job with no notice and if you are sick for an extended time you will lose a lot of money. You'd only want to do it if you don't have dependents or your other half has a flexible job and can take time off for children's illnesses, and can carry the household through for your periods of unemployment

      • Lastchancetosee on 25/10/2022 - 11:58

        Absolutely, but sometimes there's no other option if you're a single parent.

        • Quantumcat on 25/10/2022 - 12:46
          +3

          Well, if you're a single parent taking a contracting job is unnecessarily risky. You would go for a permanent job.

    • spaiydz on 27/10/2022 - 12:44

      For those who wish to compare contractor day rate vs permanent employee salary, the rule of thumb in the industry is x220 to annualise a day rate to a full year view factoring leave, public holidays.

      Then of course there's a premium one would need to add on top of a "permanent employee" salary to justify the risks associated with contractor work, which would vary.

  • dasher86 on 24/10/2022 - 11:02
    +3

    Not enough information.

    Daily rate does that include super?
    Does that include leave entitlements (probably not).
    Need to take into account 4 weeks annual leave and maybe sick leave unpaid if any.
    *based on 7213 it does take into account working 48 weeks and super is included in your $500.

    • looseygoosey on 24/10/2022 - 11:06

      so ~$7213 would be roughly correct?

      (based on 48 weeks, inc super)

      • dasher86 on 24/10/2022 - 11:22

        assuming you're entitled to public holidays on pay.

      • Edgecrusher on 24/10/2022 - 11:31
        +2

        I worked out around $7135 ish. So close to that mark.

        Do you also need to take out insurances in case you are injured at work, or get sick?
        Do you have any other costs?

        • looseygoosey on 24/10/2022 - 11:38

          insurance: didn't know about that :(
          other costs: i think the recruiter mentioned an admin fee?

          • Edgecrusher on 24/10/2022 - 16:52
            +1

            @looseygoosey: As a contractor you won’t be under their workers compensation, you’d need personal injury or similar.

            If you get sick for any length of time also you’ll have no money coming in, you’ll need sone sort of salary continuation/income protection too.

            Also if you plan on taking four weeks leave per year, guess what? It will drop a months pay from your total.

            Personally I wouldn’t head into contracting, but my risk appetite is low. Family, young kids etc.

  • CyberMurning on 24/10/2022 - 11:03
    -2

    just ask the new job what is their annual. compare annual and annual. done. take the higher one. done

  • pharkurnell on 24/10/2022 - 11:05
    +79

    You work in HR and cant figure out pay rates?

    • jellykingdom on 24/10/2022 - 11:16
      +15

      Thank god doesn't work in Accounts

      • Lord Fart Bucket on 24/10/2022 - 12:03
        +8

        Or cyber security at optus

        • CyberMurning on 24/10/2022 - 12:09
          +8

          or marketing staff at Dell - (hello Muzeeb, if you are reading this, how are you? miss you already)

        • monkeyfood on 25/10/2022 - 00:59

          there is no such department at optus

        • unhuman on 25/10/2022 - 08:50

          The dream job

    • keejoonc on 24/10/2022 - 11:45

      Exactly my thoughts.

    • CodeXD on 24/10/2022 - 12:29

      Came here to ask the same question ahaha

    • websterp on 24/10/2022 - 12:41

      Exactly what I was thinking!

    • suchan on 24/10/2022 - 15:48
      +2

      HR and Payroll are two different things though?

      How is working in HR equates to knowing how to figure out pay rates?

      • pharkurnell on 24/10/2022 - 15:52
        +3

        I believe HR offers jobs to people with salary/wage offers They have since I started in the 80's…

        Usually they need to know the $/hr or overall.. usually in a range $20 - 35/hr etc

        Can be confusing

      • 1st-Amendment on 28/10/2022 - 14:45
        +1

        How is working in HR equates to knowing how to figure out pay rates?

        Because when you offer candidates roles you need to be able communicate what the offer is.
        Also it's like year 7 maths to work it out, how do people not understand that?

      • tonka on 07/11/2022 - 01:52

        Remuneration is part of HR, benchmarking, packaging, negotiation etc. How does HR employ someone without figuring out the pay rate? Payroll look after gatekeeping that, applying tax, leave balances compliance and getting it paid.

    • looseygoosey on 24/10/2022 - 17:04
      +2

      more like, i work with HR but it's just easier to say in.

      i'm a weird person. i'm wary of privacy so i don't want to go into details about my job.

    • JIMB0 on 25/10/2022 - 07:40

      It's a humble brag.

    • umoddbro on 25/10/2022 - 11:05
      +9

      Judging by the HR people at our company, it doesn't require much to get the job these days.

  • jv on 24/10/2022 - 11:14

    How much would I see in my bank account each month based on a daily contracting rate of $500 p/day?

    How many days will you work each month?

    • looseygoosey on 24/10/2022 - 11:16

      all business days (minus public hols and a 2 week christmas shutdown)
      so roughly 20-22 days per month

      • jv on 24/10/2022 - 11:17
        +10

        Then multiply it by the number of business days, and subtract super and tax.

        • pharkurnell on 24/10/2022 - 11:52
          +9

          exactly .. like you would do in HR if you were offering a position to someone…

          • smartazz104 on 25/10/2022 - 10:09
            +1

            @pharkurnell: Do we really think HR is doing any sort of mathematics, rather than just getting the final result from someone else…

      • misu p on 25/10/2022 - 10:02

        you are calculating it incorrectly. Use a calculation per year not per month. if you factor in public holidays…. xmas shutdown and sick days you are not getting to 20-22 days per month. Use 44 weeks per year.

    • surg3on on 25/10/2022 - 13:55
      +1

      Well they are in HR so….5 days of actual work?

  • highon2str on 24/10/2022 - 11:18
    +5

    If you work a 38-hour week, a good estimation of annual salary (in thousands) is to multiply hourly rate by 2.

    $500 a day = approx $65/hr

    $65 x 2 = approx. $130k pa gross

    • dasher86 on 24/10/2022 - 11:24

      need to that's a good calc if you are entitled to leave.
      If not you need to take into account time off.
      so gross would be less if contract day rate vs hourly/salary+ entitlements.

  • Lordsina on 24/10/2022 - 11:28
    +6

    https://paycalculator.com.au/ is your friend

  • djones145 on 24/10/2022 - 11:30
    +2

    you should cosider non financial points like
    - how long is the contract
    - how easy is it to get anoyther job
    - lack of job progression
    - working conditions (wfh?)
    - do u have home loan? loss of job could be hard
    - do u have a family and kids (kids usually mean sick leave!, contracts no sick leave, no pay)
    - length of time u hahe stayed in current job(any long service coming up)
    - bonuses?
    - do u get other benefots currently like discounts etc

  • cupcake on 24/10/2022 - 11:39
    +1

    Is that $500 a day after tax and after super??? Take home pay.

  • Drakesy on 24/10/2022 - 11:57

    Online Paycalculator

    • djsweet on 24/10/2022 - 12:56

      Doesn’t work well with contract rates. Ie doesn’t subtract for public holidays etc

      • HealthHazard on 26/10/2022 - 17:00
        +1

        Erm - it works perfectly with contract rates. You just adjust the number of weeks based off your own calculations. Also lets you include / exclude super in your day rate.

        • djsweet on 26/10/2022 - 17:16

          Doesn’t do public holidays and only calculates annual figures including time off. Monthly/weekly figures will be wrong

  • Archi on 24/10/2022 - 12:01
    +24

    getting paid too much, if you cant work this out

  • CyberMurning on 24/10/2022 - 12:11

    've been looking at contracting roles that are $500 p/d.

    geebus.. jelaous

    • brendanm on 24/10/2022 - 17:27
      +2

      Take out super, insurance, holidays, sick days etc etc.

      • Cherry12 on 25/10/2022 - 18:22

        Yeah, when substracting those is a very average pay, not worth it to be on a contract. I mean, with the job insecurity afterwards.

  • Cusacka on 24/10/2022 - 12:17
    +13

    If you've got 13 public holidays and take 4 weeks off for holidays, then you're working for about 227 days. @$500 that's $113,500. If you take 10 sick days in the year you subtract another $5000, giving you $108500.

    Less super you'll get about $97,000 p.a. Tax on that is about $22,000.

    That'll give you around $75K p.a, which is roughly $6250 per month.

    Of course you might be sick less, or more. You'll also have far fewer employment protections.

    • looseygoosey on 24/10/2022 - 12:42
      +1

      Thank-you for helping me out on this!

    • MisterEd on 26/10/2022 - 02:59
      +2

      This is a good response. Something I didn’t see in above comments is that As a sole contractor I think you will have to pay gst on your day rate if you’re making more than something like 50-60k

      Assuming that 500 rate is ex GST

    • Thirtyfourfifty on 26/10/2022 - 07:14
      +1

      Finally a comment that is actually helpful for OP. Good on ya!
      Yep if you are earning over 75K you need to register for GST. Read here: https://www.gstregister.com.au/gst-registration-help/2019/11…

      Based on the calculation from @Cusacka it looks like youre better off staying employed i think.

      • HealthHazard on 26/10/2022 - 17:04

        Only if you're contracting on your ABN. Most contractors get their payroll managed through the recruitment agency which handles taxes, super and then pays the contractor on TFN. Pretty much the industry standard.

  • Meho2026 on 24/10/2022 - 12:21
    +7

    probably easier to compare annual salaries then divide by 12 if you want the result in monthly terms..

    $500/day including super.
    Super rate is currently 10.5% until July 1st then 11%.
    So if $500/day includes 10.5% super, then the contractor pay is approx. $452 (ignoring cents).

    Your permanent full-time role probably includes 10 paid public holidays a year, 4 weeks paid annual leave and 10 days sick leave. You need to factor that in.

    The A/L and PH together is 6 weeks, lets assume you have 5 sick days a year (you can factor in the whole 10 days if you want). Thats 7 weeks paid leave for 45 weeks worked for $100K including super.

    Thats about $90497 a year salary.

    If the contracting role pays $452/day and you work 5 days for 45 weeks your gross salary will be $101700

    Annual tax on current income of $90497 is $19878 plus 2% medicare levy of $1809, net income=$68810 which is $5734/month

    On contractor income of $101700 tax is $23519 and medicare levy $2034, net income $76147 which would average out at $6345/month. (obviously some months you would earn less than this and some more)

    You will know this working in HR but accepting a salary package including super means you are effectively getting a pay cut every year the employer super guarantee increases, its scheduled to reach 12% by 2025. You need to negotiate a salary increase every year to counteract that.

    • looseygoosey on 24/10/2022 - 12:42
      +2

      Thank-you for taking the time out of your day to help me with this!

  • bobbified on 24/10/2022 - 12:26
    +4

    How to Calculate an Annual Salary Based on a Daily Rate?

    For Daily Rate vs Annual Salary comparisons, the standard multiplier is 220. Takes into account annual leave, sick leave and public holidays.

    That is, daily rate x 220 = Equivalent annual salary.

    • Cusacka on 24/10/2022 - 12:30

      That's good to know - I worked it out to be 227, but 220 makes sense when you consider all the other types of leave etc that you can get when you're employed full time. I hope if they're using this they remember to subtract super, then tax as well.

      • bobbified on 24/10/2022 - 12:38

        I hope if they're using this they remember to subtract super, then tax as well.

        It's all relative - if you're comparing the Daily Rate that includes tax and super, then you'd compare to the gross annual salary package inclusive of super too.

  • tsunamisurfer on 24/10/2022 - 12:53
    +2

    It is fking scary that a HR person needs to get payroll advice from a bargain website.

    Please do not go into fields like medicine.

    • bobwokeup on 24/10/2022 - 13:15
      +3

      It’s scary you didn’t know HR and Payroll are usually different teams. I’ve worked in both as an employee and contractor.

      • looseygoosey on 24/10/2022 - 16:58
        +3

        i'm also surprised at these kind of responses, but get the irony from their pov.

    • TChalla on 24/10/2022 - 23:58
      +1

      I agree, I get that HR is not payroll but they really should know this as I would expect it to be the basics from them.

      • geoffs87 on 25/10/2022 - 07:13
        +2

        Yeah this. I’d suggest 99% of the correct comments on here are not payroll people… they just understand the basics of how pay works (it’s actually not that hard).

        If you work in HR (or even adjacent to HR) and don’t understand the very basics of the following, I’d wonder how you’re eligible for a $100k p.a. HR gig:
        - how many workdays in a year
        - how does a contractor get paid
        - how to find public holiday and annual leave info
        - how to find information on tax

        My wife is a HR BP and she solves at lease one pay related issue a week (and it’s a relatively small company).

    • SoapyWooder on 25/10/2022 - 09:41

      Payroll skill set is different to HR's, just like accountant & auditor or doctor & nurse

      • 1st-Amendment on 28/10/2022 - 14:48

        Payroll skill set is different to HR's, just like accountant & auditor or doctor & nurse

        Yet all of them should've finished year 7 maths… We're talking about basic arithmetic here…

      • tonka on 07/11/2022 - 01:55

        Yep, Payroll never decide what someone gets paid.

    • smartazz104 on 25/10/2022 - 10:10
      +1

      Please do not go into fields like medicine.

      Why, doctors can't even write properly…

  • djsweet on 24/10/2022 - 12:54
    +1

    Comparing annual salary equivalence, your new equivalent annual salary would be (248-20)*500=114000 inc super. On avg this is $6422 monthly take home.

    • djsweet on 24/10/2022 - 13:56
      +1

      This is not quite equivalent as it doesn’t consider sick leave. Assuming you are sick for 10 days in the year, your equivalent annual salary would drop to 109000, which is 6175 monthly avg take home.

  • AndyC1 on 24/10/2022 - 13:04

    Newbie poster from HR asking about salary…

    What a company to stay away from if HR staff have no idea how to calculate a yearly salary as they have everything to do the calcs..

    • pharkurnell on 24/10/2022 - 13:45

      but demands their worth of 500 a day

    • nobro25 on 24/10/2022 - 23:28

      Maybe because HR and Payroll are different departments. Case in note if you don't know.

      HR deals with situations that happens in the work place where it goes beyond escalating beyond your supervisor or manager. Eg. Workplace harassment, abuse of any nature etc.

      Payroll deals with rostering, leaves (annual, sick etc), company payroll, taxation and superannuation.

      These sections have completely different roles and normally the company will have different phone numbers for each.

      • geoffs87 on 25/10/2022 - 07:15
        +2

        I commented on the same topic above… HR would not be expected to solve payroll matters, but should at least have a basic understanding of how pay works. Heck I’m not in HR and I know how it works…

  • Seraphin7 on 24/10/2022 - 13:47
    +1

    Without getting involved in tax or with/without super, I multiply the daily rate by 231 to get an equivalent annual number.

    Here's the logic … 365 days per year, less 104 weekend days, less 20 days annual leave, less 10 public holidays.

    Adjust the above as you see, including for sick days (it's amazing how healthy people with no sick leave entitlements are).

    • AndyC1 on 24/10/2022 - 13:52

      Most contractors do not take annual leave if the contact is 12 months or shorter.

      • Seraphin7 on 24/10/2022 - 13:54

        Yes, so adjust accordingly for a given circumstance. It's trying to get to an equivalence to a "permanent salary". Obviously YMMV depending on what specific scenarios you throw at it.

        • AndyC1 on 24/10/2022 - 14:13

          Sure does and it gets more complex as 11 days is the NSW public holiday number, but it's not the same in every state. Brissy gets a day off for the Ekka, but Sydney does not.

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