How much more do I need to earn self-employed to match my salary?

More than the salary, and how much more depends almost entirely on your business costs and how much of your time is billable. The salary itself is not the target: the target is the salary plus the employer KiwiSaver contribution, plus anything else the employer paid for, plus the ACC work levy you now carry, plus your own running costs. On a typical set of assumptions that is a revenue figure 10 to 20 percent above the salary, and the day rate implied by it can be double what the salary works out to per day, because you are billing far fewer days than you are paid for as an employee.

Do I pay more ACC as a sole trader?

Yes, but less than people expect, because part of what you pay you were already paying. An employee pays the ACC earner levy through PAYE, and a self-employed person pays that same earner levy on their income, so it is not an extra cost of going self-employed. What is extra is the work levy and the Working Safer levy, which an employer used to pay on your behalf and which you now pay yourself. Those rates depend on your classification unit and vary widely between occupations, so this calculator asks for the rate rather than assuming one.

Why is the day rate so much higher than my salary divided by working days?

Because an employee is paid for roughly 260 days a year and a self-employed person bills far fewer. Four weeks of annual leave, twelve public holidays and a handful of sick days remove about 37 days before you start. Then quoting, invoicing, chasing payment, admin and business development remove a further share of what is left, commonly 20 to 30 percent. A salary spread over 260 paid days becomes a rate charged over perhaps 170 to 180 billable ones, and that alone accounts for most of the difference.

Should I include income protection insurance?

It is worth pricing in, because sick leave is one of the entitlements that disappears entirely and ACC only covers injury, not illness. A New Zealand employee accrues ten days of paid sick leave a year; a sole trader who is unwell simply does not earn. Whether the premium is deductible depends on the policy, broadly on whether any benefit paid out would itself be taxable, so check the specific product rather than assuming either way.

Does this account for tax?

It compares pre-tax amounts, which is the honest comparison, because salary and self-employed profit are taxed on the same brackets at the same rates. A dollar of profit and a dollar of salary attract the same income tax, so adding tax to both sides would change both figures without changing the answer. What does differ is timing: PAYE comes out as you are paid, whereas self-employed tax arrives as a terminal tax bill and then as provisional instalments, which is a cashflow problem rather than a cost.

Self-Employed Replacement Income Calculator NZ 2026

Reviewed 5 August 2026.

Quick answer Replacing an $80,000 salary with 3% employer KiwiSaver and $1,000.00 of other benefits takes $91,273.66 of annual revenue, which is $11,273.66 more than the salary. After leave, public holidays, sick days and 20% unbillable time you have 178.4 billable days, so the rate you have to charge is $511.62 a day, or $63.95 an hour.

People leaving a salary for self-employment usually start by asking what income would match what they earn now, and usually answer with the salary itself. That answer is wrong twice over. It is too low, because a salary is only part of what an employer pays for you: the KiwiSaver contribution, the ACC work levy, and often insurance, a phone or professional subscriptions all sit on top of it, and every one of them becomes yours. And it is the wrong unit, because what you need is not an annual figure but a rate, and the rate depends on how many days you can actually bill. An employee is paid for about 260 days a year and works perhaps 223 of them; a self-employed person bills only the fraction of those 223 that a client will pay for, with quoting, invoicing, chasing and admin taking the rest. This calculator does both steps: it works out what the whole package is really worth, then divides it by the days you can genuinely sell, which is the number that tells you whether the move works.

Current gross salary Before tax

Employer KiwiSaver Percentage your employer contributes

Other employer-paid benefits Insurance, phone, subscriptions, per year

Your business running costs Accounting, insurance, software, per year

ACC work levy per $100 Work plus Working Safer, varies by trade

Income protection cover Annual premium, replaces sick leave

Annual leave you will take Weeks per year

Public holidays 11 national plus a regional anniversary

Sick and other days Days you expect not to work

Unbillable time Quoting, admin, invoicing, chasing

Hours in a working day Used for the hourly rate

Revenue you need to invoice
$91,273.66
a year, $11,273.66 above your salary

Day rate you must charge

$511.62

across 178.4 billable days

Hourly rate you must charge

$63.95

at your working day length

What you are actually replacing

Gross salary$80,000.00

Employer KiwiSaver contribution$2,400.00

Other employer-paid benefits$1,000.00

Value of the employment package$83,400.00

Income protection replacing sick leave$1,200.00

ACC work levy you now pay yourself$673.66

Profit you need to make$85,273.66

Business running costs$6,000.00

Revenue you need to invoice$91,273.66

Extra revenue needed above your salary$11,273.66

Uplift on your salary14.09%

The days you can actually sell

Working days in a year, five days a week260.0

Less annual leave20.0

Less public holidays12.0

Less sick and other days5.0

Days available to work223.0

Less unbillable time44.6

Billable days178.4

Billable hours1,427.2

Your salary spread over paid days, for comparison$307.69

How much higher your day rate must be66.28%

How sensitive this is to unbillable time

Unbillable time is the assumption people get most wrong and the one the answer moves most on. Your own figure is highlighted.

Unbillable share	Billable days	Day rate needed	Hourly rate needed

This is an estimate, not financial advice. ACC levy rates depend on your classification unit and differ enormously between occupations, and levies are charged on liable earnings subject to minimum and maximum thresholds that are not modelled here. Whether an income protection premium is deductible depends on the policy. The comparison is made before tax on both sides, because salary and self-employed profit are taxed identically; it does not address the different timing of PAYE and provisional tax. Check your own ACC classification and confirm your position with an accountant.

The entitlements that quietly disappear

Four weeks of annual leave, eleven national public holidays plus a regional anniversary day, ten days of sick leave and bereavement leave are all paid time for an employee and unpaid absence for everyone else. That is not a small adjustment. Take four weeks and twelve public holidays out of a 260 day working year and you have removed 32 days, about an eighth of the year, before allowing for a single day of illness. The salary did not shrink to reflect that, because it never showed it in the first place. The practical consequence is that a self-employed person who wants a comparable life has to earn the same money in fewer days, and the arithmetic of that is unforgiving: fewer days over the same total means a materially higher rate, not a slightly higher one.

Unbillable time is where the estimate usually breaks

The second thing that goes wrong is assuming every available day is a billable day. It never is. Quoting work you do not win, writing proposals, invoicing, chasing late payers, doing your own books, keeping up to date and finding the next job are all real work that no client pays for. Twenty percent is a common figure and thirty is not unusual in the first year, when you are building a pipeline from nothing. The table above exists because this assumption moves the answer more than any other input on the page: going from twenty percent to thirty percent unbillable does not raise the required rate by ten percent, it raises it by about fourteen, because the denominator is shrinking rather than the numerator growing.

Worked example

Someone on an $80,000 salary receives $2,400.00 of employer KiwiSaver at 3% and $1,000.00 of other paid benefits, so the package is worth $83,400.00. Going self-employed they take out income protection at $1,200.00 a year and pick up an ACC work levy of $673.66 at 79 cents per $100, which brings the profit they need to $85,273.66. Adding $6,000.00 of business running costs gives required revenue of $91,273.66, which is $11,273.66 more than the salary they left.

Their year has 260 working days. Four weeks of leave removes 20, public holidays remove 12 and expected sick days remove 5, leaving 223 days available. At 20% unbillable that is 178.4 billable days, so they must charge $511.62 a day or $63.95 an hour. Their old salary spread over the days they were paid for was $307.69 a day, so the rate they have to quote is 66.28% higher than the salary made it look.

How this is calculated

The employment package is the salary plus the employer KiwiSaver contribution at the percentage you enter plus any other benefits. Required profit is that package plus the income protection premium plus the ACC work levy, and because the levy is itself charged on the profit it is solved rather than estimated: required profit equals the package and premium divided by one minus the levy rate. Required revenue adds business running costs. Billable days are 260 less annual leave at five days a week, less public holidays, less the sick and other days you enter, and the remainder is multiplied by one minus the unbillable share. The day rate is required revenue divided by billable days, and the hourly rate divides that by your working day length. The salary comparison spreads the salary over the 260 days an employee is paid for, because that is what makes the gap visible.

Related NZ calculators

Day Rate Calculator for converting a known day rate to a salary
ACC Levy Self-Employed Calculator for the levy you now carry
First Year Self-Employed Tax Bill Calculator for the year one cashflow
Leaving PAYE Mid-Year Tax Calculator for the year you make the move
Annual Deductible Expenses Calculator for the running costs side
ACC for the Self-Employed