Setting Your Day Rate: A Complete Guide
Determining the right day rate is one of the most important decisions for any contractor.
Factors to Consider
Your Base Costs
- Salary equivalent
- Superannuation (11% minimum)
- Annual leave provisions
- Sick leave provisions
- Professional development
- Equipment and software
- Insurance
- Accounting fees
Market Factors
- Industry standards
- Your experience level
- Demand for your skills
- Project complexity
- Contract duration
The Formula
A simple starting point: Annual Salary ÷ 220 working days × 1.3-1.5 = Daily Rate
The multiplier accounts for:
- Non-billable time
- Business expenses
- Profit margin
- Risk premium
Negotiation Tips
- Research market rates for your role and experience
- Highlight your value - specific skills and experience
- Be confident but realistic
- Consider the total package - not just the daily rate