// AUSTRALIAN TRADIE RATES AND BENCHMARKS 2026
Subcontractor vs employee cost: which is cheaper for a trade business?
Subcontractor vs employee cost comes down to the price of an hour actually worked. An employed electrician on the 2026 award floor of $32.19 per hour costs about $43.63 per worked hour once super, leave and workers comp are added, while subcontract electricians charge $80 to $150 per hour including GST, with nothing owed on top.
Last updated: 18 August 2026. Sources: 6 official and published datasets.
// THE EMPLOYEE COST STACK
What an employee really costs per hour
The wage on the payslip is the floor, not the cost. Here is the stack for a licensed electrician employed on the award minimum, full-time at 38 hours.
| Cost line | Figure | Source |
|---|---|---|
| Award wage floor | $32.19/hr, $63,607 a year* | Fair Work pay guide MA000025, grade 5 incl. allowances, effective 1 Jul 2026 |
| Superannuation guarantee (12%) | + $7,633 a year | ATO: 12% for 2025-26 and 2026-27 |
| Annual leave loading (17.5% on 4 weeks) | + $856 a year | Fair Work, MA000025 |
| Workers compensation | + $854 a year† | WorkCover Queensland average, $1.343 per $100 of wages, 2025-26 |
| Paid weeks not worked | ~8 weeks* | 4 weeks annual leave + 10 days personal leave (Fair Work NES) + public holidays |
* Derivations, not published statistics: annual wage = $32.19 x 38 hours x 52 weeks; the ~8 non-working weeks assume about two weeks of public holidays, which vary by state. † State-dependent; schemes price industry and claims history, so trades can pay above this average.
$43.63 per hour actually worked, derived: $72,951 a year over 1,672 worked hours (44 weeks x 38). Vehicle, tools and insurance are extra.
// THE SUBBIE SIDE
What a subcontractor costs
Subcontract electricians charge $80 to $150 per hour including GST, typically $115 (Web Blend, Australian Tradie Rates and Benchmarks 2026). Ranges for the other eight trades are on the rates hub with their sources.
One invoice, no entitlements: no leave, no loading, no workers comp premium; the subbie insures themselves. A GST-registered business claims the 10% GST back, so the typical $115 hour nets out near $104.55 ex GST (a derivation). Caveat: under ATO guidance, a contract wholly or principally for a person's labour still attracts the 12% super guarantee, ABN or not.
// THE COMPARISON
Side by side: an electrician, both ways
| Line | Employee (award floor) | Subcontractor |
|---|---|---|
| Headline rate | $32.19/hr on the payslip (Fair Work MA000025) | $80 to $150/hr incl. GST, typical $115 (Web Blend dataset) |
| Added on top | Super 12%, 17.5% leave loading, workers comp, ~8 paid weeks not worked | Nothing owed; GST claimed back |
| Cost per worked hour | ~$43.63 (derived above) | ~$104.55 ex GST at the typical rate (derived) |
| What the rate covers | Labour only; you supply the ute, tools, insurance and supervision, and pay through quiet weeks | Their ute, tools, insurance, downtime and margin sit inside the rate |
| When the cost stops | When employment ends; notice, sometimes redundancy | When the job ends |
Both per-hour figures are derivations from the sourced inputs above. The gap narrows once the employee's vehicle, tools and idle time are counted; the subbie's rate already carries them.
So the decision is utilisation, not the rate card: an employee is the cheaper hour only while you can fill their week, every week. Weighing a third option? See how much an apprentice costs.
// EMPLOYEE OR CONTRACTOR
The ATO test: the contract decides, not the label
An ABN and an invoice book do not pick the classification. ATO guidance, following the High Court's 2022 Personnel Contracting and Jamsek decisions, weighs the legal rights and obligations in the contract and the totality of the relationship: who controls the work, who can delegate it, who supplies the tools, who carries the commercial risk. No single factor decides it.
Misrepresenting an employment relationship as independent contracting is sham contracting, and it carries penalties under the Fair Work Act (Fair Work Ombudsman).
// FREE TOOL
Run your own numbers
The charge-out rate calculator works out what an hour needs to earn from your wages, overheads and margin.
Charge-out rate and day rate calculator Free, runs in your browser, trade presets includedAn employee only beats the subbie when the work keeps coming. Web Blend's Lead System keeps trade businesses booked consistently enough to make the hire pay off.
See the Lead System →// COMMON QUESTIONS
Subcontractor vs employee cost FAQs
Straight answers, from the sourced figures above.
Get in touchIs a subcontractor cheaper than an employee?
Not per hour. The typical $115 subbie hour is about $104.55 ex GST against roughly $43.63 per worked hour for an award-floor employee, but the subbie rate includes their vehicle, tools, insurance, downtime and margin, and it stops the moment the job ends.
Do I have to pay super to a subcontractor?
Sometimes. Under ATO guidance, a contract that is wholly or principally for a person’s labour attracts the 12% super guarantee even if the worker invoices through an ABN.
Can I just put a worker on an ABN instead of employing them?
No. The legal rights and obligations in the contract decide the classification, not the label, and misrepresenting employment as contracting is sham contracting under the Fair Work Act.
// METHODOLOGY & SOURCES
Sources and methodology
Every figure is transcribed from a dated source below, read from the Australian Tradie Rates and Benchmarks 2026 dataset, or derived and labelled. All sources accessed 18 August 2026.
- Fair Work pay guide, MA000025 (electrical worker grade 5, effective 1 Jul 2026)
Page date: pay guide dated 7 Aug 2026. Accessed 18 August 2026.
- Fair Work Ombudsman, Electrical Contracting Award MA000025 (17.5% annual leave loading)
Page date: current award document. Accessed 18 August 2026.
- ATO, super guarantee percentage: 12% for 2025-26 and 2026-27
Page date: current rates table. Accessed 18 August 2026.
- ATO, employee or independent contractor
Page date: current guidance. Accessed 18 August 2026.
- Fair Work Ombudsman, sham contracting
Page date: current guidance. Accessed 18 August 2026.
- WorkCover Queensland, target premium rate steady for 2025-26
Page date: published 2025. Accessed 18 August 2026.
Every input in the comparison, with sourced and derived rows marked. Free to reuse with attribution and a link.
// KEEP EXPLORING