Question 1

What tax rate should Australian freelancers use?

Accepted Answer

For an ABN contractor earning A$120-$150K, expect a combined effective rate of around 32-37% once ATO income tax brackets, the 2% Medicare levy, and the super you're paying yourself are in. If you're PAYG through a labour-hire arrangement, your effective rate is closer to employee PAYE. Use last year's actual effective rate from your tax return if you have it.

Question 2

How many billable hours should I actually assume?

Accepted Answer

Most freelancers overestimate this and undercharge as a result. A typical working year is ~2,000 hours, but after business development, admin, pitching, invoicing, training, and deep-work planning, genuinely billable time is usually 60-70% of that — 1,200 to 1,400 hours. If you're running a solo consultancy with lots of sales motion, it can drop to 50%. The tool starts from a realistic figure because that's where the rate that actually pays the bills comes from.

Question 3

Do I need to include super?

Accepted Answer

Yes. If you're self-employed you're not legally required to contribute to super, but if you don't, you're quietly giving yourself a ~12% pay cut vs. an employee doing the same work. The target rate should include what you'd pay yourself — otherwise your rate isn't actually competitive with a salaried equivalent. Treat super as part of your tax rate in the input.

Question 4

Why is this lower than what agencies charge?

Accepted Answer

Agencies typically mark up 2-3x on top of the freelancer's rate to cover account management, sales, bench time between projects, office overhead, insurance, and margin. Your rate as an independent contractor is the rate the agency would pay a freelancer — not the rate they bill the client. If you're comparing, knock 50-70% off the agency day rate to get the solo-freelance equivalent.

Question 5

What's the difference between the floor rate and the target rate?

Accepted Answer

The floor rate is the break-even number — charge below this and you're subsidising your clients. The target rate is what you should actually pitch: floor plus a buffer (default 20%) for slow months, unexpected expenses, and retirement savings. If you always quote your floor, you're one bad quarter away from a cash-flow problem. Quote the target rate and negotiate down from there if needed — not up.

Question 6

Is this tool free to use?

Accepted Answer

Yes — completely free, no sign-up, no account. TimeIsMoney.tools is supported by minimal, non-intrusive advertising. Nothing you enter leaves your browser.

What's the real rate to pay your bills?

Frequently asked questions

More honest tools.

What does this meeting really cost?

Did your raise beat inflation?

What's your real hourly rate?

When does the day line up?

A clean invoice in 60 seconds.