Does ABN or TFN pay more tax?

Neither — the income tax bands (0%/15%/30%/37%/45%) and Medicare Levy are the same for both. What differs is that TFN/PAYG income automatically comes with 12% employer super and paid leave, while ABN income doesn't, but can offset that with broader deductions and no compulsory super.

Do I need to pay super if I invoice on an ABN?

Generally there's no compulsory Superannuation Guarantee for a genuine ABN contractor. However, if you're paid mainly for your own labour under an arrangement that looks like disguised employment, you can be treated as an employee for super purposes under the extended definition — separate from, but related to, the PSI rules.

What rate should I charge on an ABN to match my old TFN salary?

You'd need to add back the value of the 12% super and paid leave you'd be giving up, plus cover your own tax set-aside and any GST. The salary-to-contractor-rate calculator works through this conversion in detail.

What's the difference between PAYG withholding and PAYG instalments?

As an employee, PAYG withholding is deducted from every pay by your employer. As an ABN sole trader with business or investment income above a threshold, the ATO can instead require you to pay PAYG instalments — regular prepayments towards your expected tax bill, based on your prior year's return.

Could the PSI rules affect which option is better?

Yes. If your ABN income is mainly a reward for your personal effort and you fail the PSI self-assessment tests, your income gets attributed to you much like employee income anyway, but without the automatic 12% super — often making TFN employment the better deal financially. The PSI tax calculator shows this directly.

ABN vs TFN Calculator — Contractor vs Employee Tax (Australia)

ABN or TFN: which one actually pays more

'ABN vs TFN' usually gets answered as if it were purely a tax-rate question, but the FY2026-27 income tax bands and Medicare Levy are identical either way — the same 0%, 15%, 30%, 37% and 45% bands apply whether you're invoicing on an ABN or being paid under PAYG with a TFN. The real difference is everything sitting around the tax: the 12% Superannuation Guarantee and paid leave an employee gets automatically, versus the broader deductions, GST obligations and self-funded super of a contractor.

This calculator puts the same gross income through both paths so you can see a genuine after-tax, after-super, after-leave comparison rather than a headline number that ignores what each side actually keeps.

How to use this calculator

Enter the gross income figure you're comparing
Review the TFN (PAYG) side: income tax, Medicare Levy, 12% Superannuation Guarantee and leave value
Review the ABN (sole trader) side: income tax, Medicare Levy, GST position and deductions
Use the break-even rate output to see what you'd need to charge on an ABN to match the TFN outcome

ABN vs TFN Calculator