Whether contracting or employment pays more after tax in 2026 depends on your hourly rate, available deductions, and the entitlements you give up or keep. This article compares typical scenarios for Australian stonemasons so you can see real take-home differences before making a decision. The numbers here are directional — always seek personalised tax advice for your situation.
Key Takeaways
- ABN contractors may charge a higher hourly rate, but they must manage their own tax, super, insurance, tools, admin, and unpaid downtime.
- PAYG employees receive employer-paid super plus paid leave and other NES entitlements, which can make the total value of employment stronger than the base hourly rate suggests.
- Contractors often need to earn significantly more per hour than employees to stay ahead once GST treatment, tax, super, insurance, and unpaid leave are considered.
- The 2025–26 super guarantee rate is 12%, so contractor comparisons should factor in self-funded super at the same rate if they want to match employee super benefits.
- From 26 August 2024, many businesses use Fair Work’s “whole of relationship” test to assess whether a worker is genuinely a contractor or should be treated as an employee.
2026 After-Tax Earnings: Contracting vs Employment for Stonemasons
Let’s put real numbers on the table. A full-time PAYG stonemason employee earning $45 per hour for 38 ordinary hours across a full paid year grosses approximately $88,920 before tax, excluding employer super. If comparing only 48 active working weeks, clearly state that this excludes the value of paid annual leave. After income tax and Medicare levy, take-home pay lands around $61,500 annually — roughly $1,281 per week in hand.
Now consider an ABN stonemason contractor billing $65 per hour on the same hours. That’s $118,560 gross. After income tax and Medicare, and before business expenses, net pay depends on whether the $65/hr rate is quoted GST-exclusive or GST-inclusive. If the rate is GST-inclusive, one-eleventh of the invoice amount is GST collected for the ATO, not contractor income — but subtract self-funded super at 12% if the contractor wants to match the 2025–26 super guarantee rate that employees receive from their employer, $3,000 in public liability insurance, and $2,500 in tool and vehicle costs. Real take-home drops to approximately $66,000, or $1,375 per week.
The gap is smaller than most people expect. At $65/hr contracting versus $45/hr employed, the contractor only takes home about $94 more per week. Lose a few weeks to no work, and that advantage disappears fast.
| Scenario | Gross Annual | Est. Tax + Medicare | Entitlements / Deductions | Est. Take-Home (Annual) | Weekly Take-Home |
|---|---|---|---|---|---|
| PAYG Employee @ $45/hr | $82,080 gross | ~$17,050 | Super, leave paid by employer | $65,000 | ~$1,281 |
| ABN Contractor @ $65/hr | $118,560 | ~$38,560 | Self-funded super, insurance, tools | ~$66,000 | ~$1,375 |
These figures are illustrative only and assume Australian tax residency, no HELP debt, no tax offsets, and consistent work. Actual take-home pay can vary depending on deductions, GST treatment, private health cover, insurance costs, and personal tax circumstances.
Income and Tax Treatment for ABN Subcontractor vs Employee Stonemasons
The tax treatment between these two arrangements is fundamentally different. PAYG stonemason employees have tax withheld by their employer each pay cycle — straightforward, predictable, and low admin. Contractors manage their own tax obligations, which may include BAS lodgements, annual income tax returns, and GST remittance once turnover reaches the $75,000 GST registration threshold.
You might be wondering whether the deductions available to contractors make up for this complexity. They can — but only if you track them properly throughout the year.
1. PAYG Withholding for Stonemason Employees
Employers withhold income tax from every pay. You receive a net wage with no tax surprises at year-end, assuming your employer calculates correctly. This simplicity has real value, especially for stonemasons focused on the tools rather than bookkeeping.
2. Income Tax for ABN Stonemason Contractors
Contractors pay tax on net profit — revenue minus allowable deductions. This means your taxable income can be reduced through legitimate business expenses before tax is calculated. The catch is that you must keep records and lodge returns on time or face ATO penalties.
3. GST Registration and Remittance
Once your stonemason contractor income in Australia exceeds $75,000 annually, GST registration is mandatory. You charge 10% GST on invoices and remit it to the ATO quarterly. This does not increase your income — it is collected on behalf of the government.
4. Tax Deductions for Trade Contractors
Legitimate deductions available to ABN stonemason contractors include vehicle costs, tools and equipment, work clothing, phone and internet, home office expenses, and insurance premiums. When tracked properly, these deductions can reduce taxable income by $10,000–$15,000 or more annually. That is where the real financial advantage of contracting can emerge.
5. Medicare Levy and Surcharge
Both employees and contractors pay the 2% Medicare levy on taxable income. Employees and contractors may pay the Medicare Levy Surcharge if their income is above the relevant threshold and they do not hold appropriate private hospital cover. This is a cost employees often overlook when comparing offers.
Entitlements and Hidden Costs: Superannuation and Leave Entitlements Compared
This is where the real take-home pay comparison gets interesting. PAYG stonemason employees receive employer-funded superannuation at 12% of ordinary time earnings in 2025–26 — that is $9,439 per year on an $82,080 salary, paid on top of wages. Employees also receive paid annual leave (4 weeks), sick leave (10 days), and public holidays, which together represent roughly 20–25% of salary in additional value.
Contractors receive none of this directly. Every day off is an unpaid day.
1. Superannuation for Employees vs Contractors
Employees receive super contributions from their employer — money that builds your retirement fund without reducing your take-home pay. Contractors must fund their own super from their gross income. If you skip this, you are effectively earning less in real wealth terms than the hourly rate suggests.
2. Annual Leave and Sick Leave
Four weeks of paid annual leave plus 10 days of paid sick leave equals roughly 6 weeks of income protection per year for employees. A contractor who gets sick for two weeks loses two weeks of income. Over a career, this gap compounds significantly.
3. Workers Compensation Insurance
Employers cover workers compensation for PAYG employees. Contractors must hold their own personal accident and income protection insurance. Quality coverage can cost $2,000–$4,000 annually depending on the risk level of stonemason work.
4. Public Liability Insurance
Most builders and developers require ABN contractors to carry public liability insurance — typically $1,500–$3,000 per year. This is a business cost employees never see. It reduces net contractor income before any tax calculation begins.
5. Tools and Equipment Costs
Employees often use employer-supplied tools and equipment on site. Contractors typically supply their own, or at least maintain and replace them at personal cost. Budget $1,500–$3,000 annually for a working stonemason’s tool maintenance and replacement cycle.
6. No Redundancy Pay or Notice Period
Eligible employees may receive notice and redundancy pay depending on continuous service, employer size, award or agreement coverage, and the reason employment ends. Contractors generally rely on the termination terms in their contract and may not receive paid notice, redundancy pay, or income beyond work already completed. This financial exposure is real and often underestimated.
Risk, Compliance, and Admin Load in Contracting vs Employment for Stonemasons
Since 26 August 2024, many constitutionally covered businesses use Fair Work’s ‘whole of relationship’ test to assess whether a worker is an employee or contractor. This means a stonemason who works fixed hours under direction, cannot subcontract their work, and uses the builder’s tools may be treated as an employee for workplace-law purposes, even with an ABN and invoices. Misclassification, known as sham contracting, can attract significant penalties for both the worker and the engaging business.
You should check your actual working arrangement against this test before accepting any ABN-based role. The label on the contract does not determine your legal status — the reality of how you work does.
1. The “Whole of Relationship” Employment Test
Fair Work and the ATO look at who controls when and how work is done, whether the worker can subcontract, and who supplies tools and equipment. If the practical working arrangement points to employment, the worker may be treated as an employee for workplace-law purposes even if they have an ABN and issue invoices. Business.gov.au provides a free tool to assess your situation.
2. BAS Lodgement and Record-Keeping
Contractors lodge Business Activity Statements quarterly. Missing deadlines triggers ATO penalties and interest charges. This admin burden is real — many stonemason contractors pay an accountant $1,000–$2,000 annually to manage it correctly.
3. Income Instability and Dry Periods
Contracting income fluctuates with project availability. A two-week gap between contracts with no paid leave buffer can erase weeks of rate advantage. Employees receive consistent wages regardless of project delays or weather shutdowns.
4. Superannuation Compliance for Contractors
In some cases, businesses must pay super for contractors, especially where the contract is wholly or principally for the contractor’s labour, even if the contractor has an ABN. The ATO outlines these obligations clearly. Check whether your contractor arrangement qualifies.
5. Professional Indemnity and Contract Risk
Contractors carry the risk of defective work claims. If a stone installation fails and a client pursues damages, the contractor bears that liability personally. Employees are generally covered by their employer’s insurance for work performed in the course of employment.
Current Stone Industry Jobs in Australia: Where These Arrangements Play Out
Understanding the contracting vs employment decision becomes more practical when you look at what is actually available in the market right now. Stone industry jobs in Australia span both employment and labour-hire arrangements, and the total package — rate, stability, and conditions — varies significantly between roles and states.
Dayjob Recruitment lists current stonemason vacancies across New South Wales and Western Australia, covering both direct employment and contracting-style positions so you can compare real offers side by side.
Stonemason Leading Hand – NSW
This role is suited to experienced stonemasons ready to step into a supervisory position on active NSW construction sites. It offers a structured employment arrangement with leadership responsibilities and a competitive package reflective of the seniority involved.
Stonemason Installer – Smithfield, Sydney
Based in Smithfield in Sydney’s west, this installer role focuses on the hands-on fitting and finishing of stone products across residential and commercial projects. It is a practical, trade-focused position with steady workflow in one of Sydney’s busiest manufacturing corridors.
Stonemason Fabricator – Newcastle
This Newcastle-based fabrication role suits stonemasons with workshop experience in cutting, shaping, and finishing stone materials to specification. Newcastle’s growing construction pipeline makes this a stable opportunity with consistent demand for skilled fabricators.
Stonemason Installer – Osborne Park, Perth
Located in Osborne Park, this Perth-based role offers stonemason installers access to Western Australia’s active residential construction market. It is a strong option for tradespeople looking to establish themselves in a state with high demand for skilled stone workers.
Are you a stone industry professsional looking for vacancies?
Checklist Before Switching: Questions Every Stonemason Should Ask
Before you switch from employment to contracting — or the other way around — run through this checklist. The numbers in this article are a directional guide, not a guarantee. Your actual outcome depends on the specifics of your situation.
- What is the hourly or daily rate being offered, and does it exceed your current employee rate by at least 30–50%?
- Will you have consistent work, or are there likely gaps between contracts?
- Are you prepared to self-fund super, insurance, tools, and accounting costs?
- Does the arrangement pass the ATO’s whole of relationship test — or are you actually an employee with an ABN?
- Have you calculated your real take-home after tax, super, insurance, and unpaid leave?
- Do you have the admin systems in place to lodge BAS, track deductions, and manage cash flow?
- Have you spoken to a registered tax agent or accountant about your specific circumstances?
If you are unsure where to start, Dayjob Recruitment can connect you with current stonemason roles across both employment and contracting arrangements. Visa-aware placements are also available for skilled tradespeople on 482 and related pathways. Talk to our team or view current openings to see what is available right now.
Final Thoughts on After-Tax Earnings for Stonemasons in 2026
Contracting pays more per hour, but employment often delivers more security and comparable net income once entitlements are factored in. The right choice depends on your rate, consistency of work, and willingness to manage business admin. Use the numbers here as a starting point, then get advice tailored to your exact situation before you decide.
Dayjob Recruitment connects Australian stonemasons with top contracting and permanent roles suited to your goals. Browse our daily skilled trades recruitment listings to find the right fit for your 2026 earnings strategy. Get started today—call us on (02) 6100 1383.
Do you work in the stone industry and are open to new opportunities? We run a WhatsApp Channel where we share specifically Stone Industry job openings across Australia — including roles for CNC operators, fabricators, and installers.
FAQs
What Is the Difference Between Being Self-Employed and Employed as a Stonemason?
An employed stonemason is paid wages (often with superannuation, leave, and workers’ comp covered) and has tax withheld via PAYG. A self-employed stonemason (contractor/subbie) invoices for work, sets their own rates, manages their own tax and super, and typically supplies more tools/insurances. In our stonemasonry recruitment work, the best fit usually comes down to how much admin risk you want versus how much flexibility and rate control you need.
Is It Better to Work as a Subcontractor or Employee Stonemason?
It depends on your priorities. Subcontracting can suit experienced stonemasons who want higher gross rates, more control over hours, and the ability to claim business expenses. Employment can suit those who value stable income, paid leave, simpler tax, and employer-covered protections. Dayjob Recruitment often sees stonemasons switch between both depending on project pipelines, family commitments, and market rates.
Do Stonemasons Earn More as Contractors Than Employees?
Contractors often earn more before tax and costs, but the “after-tax” outcome can be similar once you factor in unpaid leave, downtime between jobs, insurance, accounting, super, and tool/vehicle costs. In 2026, the higher your utilisation (consistent booked work) and the better your expense tracking, the more likely contracting can come out ahead. We help candidates compare real take-home outcomes based on typical site rates and expected continuity.
What Taxes and Insurance Do Self-Employed Stonemasons Need Compared to Employees?
Employees generally have PAYG withheld, receive super contributions, and are covered by employer workers’ compensation (and often some insurances). Self-employed stonemasons typically manage income tax (often via PAYG instalments), GST registration if turnover meets the threshold, super contributions, and may need public liability insurance, contract works insurance, tool/plant cover, and (where applicable) personal accident/income protection. Requirements can vary by state, contract, and site rules, so it’s worth confirming before starting a new project.
What Are the Pros and Cons of Contracting vs Employment for Stonemasons?
- Contracting pros: higher gross rates, flexibility, choice of projects, potential tax deductions.
- Contracting cons: variable income, no paid leave, admin burden, insurance costs, and compliance requirements.
- Employment pros: stable pay, paid leave, simpler tax, employer-covered protections, clearer career pathways.
- Employment cons: less rate control
