NZ BUILDERS
Rate & Margin CentreAvailableReviewed 12 Oct 2026

Wages to Contract Rate Calculator

See what an hourly contract offer needs to cover before it is a real pay rise. The result is break-even, not a recommended rate.

1. Your wage now
$
hours

Default 1,832: 2,080 hours (40 a week × 52) minus 4 weeks' annual leave (160 hours) and 11 public holidays (88 hours). Leave is costed separately in step 2. Only used to work out your wage over a year.

2. Costs your boss pays now

As a contractor you cover these yourself. Enter each as a % of your wage over a year or as $ a year. Switching between % and $ converts the amount, so the result stays the same.

%

Default 3.5%, the employer minimum from 1 April 2026.

KiwiSaver (employer) entered as
%

Default 2%. Check the actual levy for your work.

ACC levy entered as
%

Default 8%, about 4 weeks' annual leave.

Annual holidays entered as
%

Default 4.8% for 11 national public holidays. Adjust for the days you'd otherwise work and your regional anniversary day.

Public holidays entered as
%

Default 4%, about 10 days a year.

Sick leave entered as
3. Your business costs

Costs of running your own business, as yearly amounts. The default is $4,500 a year across tools, public liability insurance, and accounting or admin.

$/ year
$/ year
$/ year

Business costs total: $4,500 a year

4. Hours you'll actually bill

The hours a year you expect to charge a client for. This is separate from the hours you're paid for in step 1: changing one does not change the other. Allow for rain days, gaps between jobs, quoting, admin and other time you can't bill.

hours

Quick picks

1,500: Realistic with rain, quoting and admin.

Break-even contract rate

$62.75 / hour ex GST

Ex GST means before adding 15% GST. If you're GST-registered, you'd invoice $72.16 an hour including GST and pass the GST on to IRD.

Anything above this is what you are being paid for taking on the risk.

Your wage over a year
$73,280
Costs your boss pays now
$16,341
Business costs
$4,500
Break-even incl GST
$72.16
How this is worked out
  1. Your wage over a year: $40.00 × 1,832 hours you're paid for = $73,280
  2. Costs your boss pays now, which you'd cover: $16,341
  3. Business costs: $4,500
  4. Break-even = $94,121 ÷ 1,500 hours you'll actually bill = $62.75 ex GST

Profit is fixed at 0%. This compares costs only. It does not decide whether a working arrangement is legally employment or contracting.

Keep this result

Nothing is saved by NZ Builders. The share link carries your inputs in the link itself.

Pricing employees or a team instead? Use the NZ Builder Rate and Margin Centre.

A contract rate has to replace more than the wage. A contractor may carry costs an employer normally pays, including KiwiSaver, ACC, annual holidays, public holidays, sick leave, tools, insurance and admin.

This calculator fixes profit at 0% and shows the break-even rate after those costs and the hours you'll actually bill. Anything above break-even is the amount left for taking on the risk.

Use your own numbers. A rate can look higher than wages and still leave little or no gain once unbilled time and business costs are included.

Worked Example

  • At a $40 hourly wage with the default costs your boss pays now and $4,500 a year of business costs, break-even is about $51.38 an hour ex GST if you bill 1,832 hours a year.
  • At 1,700 hours billed, break-even is about $55.37 an hour ex GST.
  • At 1,500 hours billed, break-even is about $62.75 an hour ex GST.

Quick Answers

Is a $55 contract rate better than a $40 wage?

It depends on the costs and hours you take on. With the default assumptions, $55 is near break-even if you bill about 1,700 hours a year. Change every input to match the actual offer.

Why is profit fixed at 0%?

The result is a cost comparison. It shows the minimum rate that covers your wage over a year, the costs your boss pays now and your business costs before adding a return for risk or profit.

Does a contractor label mean I am self-employed?

Not by itself. Employment status depends on how the work happens in practice. Get advice if the arrangement is unclear.

Sources & Methodology

Employment NZ: Employee or contractorEmployment NZ: Public holiday rightsRate and margin methodology

Limitations

  • Break-even is not a recommended rate and does not include profit, income tax, finance costs or every business risk.
  • The result depends on the hours you can actually invoice and the costs in the specific arrangement.
  • This calculator does not determine whether a person is legally an employee or a contractor.

Disclosure

General guidance only. This is not employment, tax, financial, legal or pricing advice. Contractor status depends on the real working relationship, not the label on an agreement.

Related

NZ Builder Rate and Margin CentreBuilder Charge-Out Rates in NZ: What Builder-Owners Need to Price Properly

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