Self-Employed Replacement Income Calculator NZ 2026
Reviewed 5 August 2026.
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.
What you are actually replacing
The days you can actually sell
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 |
|---|
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