What "38 hours a week" actually means
A full-time week in Australia is set at 38 ordinary hours by the National Employment Standards, under section 62 of the Fair Work Act 2009 (Cth), enforced by the Fair Work Ombudsman. That's the figure this calculator uses by default for hours worked per week, though plenty of trades businesses run longer weeks in practice, especially once travel and site setup are added on top of billable time. If your business genuinely works a different week, change the number. The default is a sensible starting point, not a rule this tool enforces.
Where the calculator gets more useful is the second assumption, weeks worked per year, because 52 is the wrong number for almost everyone on a salary. A full-time or part-time employee accrues 4 weeks of paid annual leave a year under the NES, set out in section 87 of the Fair Work Act, which is why the default here backs that leave out of 52 rather than treating every week as a working week. Public holidays reduce the real number further still, and how many fall in a given year depends on the state or territory and which day of the week they land on, so this tool deliberately doesn't bake in a public holiday count. It's not a figure we can source to a single, stable authority the way the leave entitlement is, and a wrong number quietly baked into a "default" is worse than no number at all. If you want a more precise figure for your own situation, subtract your state's public holidays from the weeks figure yourself.
The trap in comparing a salary to an hourly rate
Here's the part that catches people out. An annual salary already has two things sitting inside it that an hourly rate doesn't automatically carry: superannuation paid by the employer on top, and paid leave built into being paid every week of the year, including the weeks you're not actually at work. Divide a salary by hours and weeks worked and you get a genuine hourly figure for that employee's ordinary time earnings, but it's an employee's hourly rate, sitting inside an employment relationship with obligations attached to it, not a rate you can hand a subcontractor and expect the same outcome from.
That's exactly what the employer super line in the breakdown above is pointing at. It shows what an employer would be paying on top of the salary in compulsory super, separate from and in addition to the wage itself. An employee never sees that figure directly (it goes straight into their fund), but it's real money the business spends on that hour of work, over and above what shows up as an hourly rate on a payslip. A contractor invoicing an "equivalent" hourly rate isn't getting that top-up from anyone; whatever they invoice is what they've got to fund their own super, insurance, equipment and downtime out of. Quoting or accepting the same number in both situations means absorbing a real cost that only one side of the comparison is designed to hide.
If you're setting a contractor rate rather than a payroll figure, or comparing what it costs to hire someone against subcontracting the same work, the fuller version of this comparison (one that adds super back on top and backs out the leave a contractor doesn't get paid for) lives on the contractor rate calculator. This tool is deliberately the simpler half: straight salary-to-hourly arithmetic, on your actual hours and weeks, with the super figure surfaced so you know what it's not accounting for.
Why the hours you actually work is the whole game
Two people on the same salary, working genuinely different hours, are not being paid the same rate at all, even though the number in their contract is identical. This calculator only knows what you tell it. Enter the NES default of 38 hours when you actually work ten hours more than that most weeks, and every figure it gives you is inflated, because the true hourly rate is lower once those extra hours are counted properly. The reverse holds too, for someone contracted at that average who genuinely finishes on time most weeks. Get honest about the number that actually goes into the calculator, not the number on the letterhead, and the result means something. Get it wrong, and it's just a comforting figure that doesn't match reality.
Unpaid overtime quietly changes the number
A lot of trade and small-business roles carry hours that never show up as "overtime" on paper: an early start to beat traffic, a late finish to hand a job over, admin done after dinner. None of that is illegal by itself. Under the NES, an employer can ask for reasonable additional hours on top of the standard week set out at section 62 of the Fair Work Act, and what counts as reasonable depends on things like the role, the notice given and the employee's circumstances. But reasonable or not, unpaid extra hours change the real hourly rate, and they change it every week they happen. If you suspect this is going on in your own business, or your own job, run the actual hours worked back through this calculator instead of the contracted figure. The gap between the two numbers is usually bigger than people expect.
Leave loading and public holidays move the effective rate too
Some awards and enterprise agreements pay a loading on top of annual leave, extra pay for the weeks you're not at work, over and above the leave itself. Where it applies, it lifts the real value of a salary a little further above the raw hourly figure this calculator produces, because it's money that isn't showing up anywhere in the weeks-worked assumption. Whether it applies to a given role depends entirely on the award or agreement covering that employment, so this tool doesn't build it in, for the same reason it doesn't build in a public holiday count. And public holidays cut the same direction: every one that falls on a rostered work day is a paid day off sitting on top of the 4 weeks of annual leave already counted here, which means the real number of weeks worked is lower again than "52 minus annual leave" suggests. Add it up and most salaried employees work meaningfully fewer hours across a year than a simple hours-times-weeks sum implies, so the honest hourly rate usually sits a little higher than the roughest version of the maths.
Award rate, market rate, and what the business can actually afford
These are three different numbers, and it's worth keeping them separate. The award or agreement rate is the legal floor, the least a business is allowed to pay for that role, enforced by the Fair Work Ombudsman. The market rate is whatever it actually takes to attract and keep someone in that role in your area right now, which can sit well above the award floor for trades in demand. What the business can afford is a cash flow and pricing question that has nothing to do with either of the other two, it's simply what the job margins support. Paying below the award isn't a business decision, it's a compliance problem. Paying at the award once the market has moved past it is a retention problem waiting to happen. The gap between legal and competitive is exactly where small businesses lose good people to a competitor down the road who did this sum properly. Once you know what an hour actually costs, our markup and margin calculator shows what that cost needs to become in a quote to keep the margin you're actually after.
Sanity-checking a rate against an award
If a rate coming out of this calculator looks wrong, too high, too low, or just not what you expected, the first thing worth checking isn't the arithmetic. It's whether the hours and weeks you entered actually match reality, because that's where most of the distortion comes from. Once those are right, compare the resulting hourly figure against the award that covers that role, which the Fair Work Ombudsman administers and can help identify if you're not sure which one applies. A rate below the award minimum for that classification is a problem regardless of what this calculator says, and one worth fixing before it becomes a bigger one. This tool does the conversion. It doesn't check compliance, and it was never meant to.
Where this actually matters day to day
For a trades business owner, this number shows up in three places. First, costing a job: if you're pricing labour into a quote, the hourly rate an employee costs the business isn't their payslip hourly rate. It's that plus super, plus whatever else sits on top of wages, like workers' compensation insurance. Second, comparing hiring an employee against bringing in a subcontractor for the same work, where an honest comparison has to include everything each option actually costs, not just the number quoted per hour. Third, explaining pay when moving between a salaried role and hourly or contract work, where "same number, different arrangement" is rarely actually the same money.
None of this touches tax withheld, which is a separate calculation on top of gross pay. What it does is put the real inputs (hours, weeks, and the super sitting on top) in front of you in one place, sourced back to the Fair Work Ombudsman and the ATO rather than a rule of thumb. If quoting and invoicing is where these numbers actually get used in your business, our business systems work covers what a proper setup does to that workflow, and if you're weighing this against what Delta charges for the work itself, our pricing page lays that out plainly. A site that doesn't state its own numbers clearly has the same problem this calculator solves for. See our web design work if that's part of what needs fixing.