Employed vs contractor vs own practice: what an Australian psychologist actually takes home (2024–25)

The question we hear most often from psychologists thinking about a change of role: does contractor actually pay better, or does it just look that way on the session rate?

Short answer: it depends on four numbers nobody puts on the job ad. Super, leave, practice expenses, and how GST is treated on your billing. Put those in and the comparison changes, sometimes a lot.

To make the comparison concrete, let’s use one hypothetical person in all three scenarios. None of the dollar figures below are your numbers. They’re illustrative only, and the right ones for your situation will differ. A 9-year registered psychologist, full-time, 22 sessions a week, averaging $220/session across a Medicare and private mix.

1. Public mental health (HP4 in most states)

• Headline: ~$110,000 base, plus 11.5% super on top, plus leave loading.
• Super paid by the employer. Four weeks of paid leave. Study leave. CPD budget.
• Total package, annualised: roughly $122,650.
• Take-home after PAYG, Medicare levy, and any student debt: around $82,000.

Stable, predictable, no GST, no ABN. You get paid for the year whether the clinic is booked or not. If you’ve been in private for a while, it’s easy to forget how much cognitive space that takes up.

2. Contractor, 70/30 split, private clinic

• Headline: $220/session × 22 sessions × 48 working weeks = $232,320 gross billings.
• 70/30 split: clinic takes 30%, you keep $162,624.
• Psychology services are GST-free (A New Tax System Act 1999, s38-10), so no GST to remit on therapy sessions.
• Super: you pay yourself. 11.5% of pre-tax income is about $18,700.
• Practice expenses (indemnity, AHPRA, CPD, supervision, software): ~$5,000.
• No paid leave. Four weeks off = four weeks of zero income, an implicit cost of ~$13,500.
• Take-home after tax, super, and expenses: ~$92,000.

Looks better than public on paper. On paper. The gap shrinks once you count zero leave, self-funded super, and the slow-week risk nobody tells you about in the contractor interview.

3. Own practice, 0% split

• Headline: $220/session × 22 sessions × 48 weeks = $232,320 gross billings.
• Rooms: $300/week × 48 = $14,400.
• PMS + admin: ~$100/month = $1,200.
• Indemnity, AHPRA, CPD, supervision: ~$5,000.
• Practice admin support (reception, bookkeeping): ~$15,000.
• Super: self-funded at 11.5% of net income.
• Take-home after everything: ~$110,000.

Highest take-home. You also now run a business. Marketing, chasing invoices, fixing the printer, scheduling your own CPD. Budget 15–25% of your clinical hours on admin, and a year where you’re still figuring out what “enough” marketing looks like.

If you only look at the top-line figures (public $110k, contractor $162k kept, own practice $232k billings), private practice looks like a no-brainer. The numbers underneath tell a different story.

Where the numbers actually move

Four variables swing the final take-home more than people expect.

Booking rate is the first. At 80% booked instead of 100%, contractor and own-practice take-home drops faster than linear. Your fixed costs (rooms, indemnity, software) don’t scale down when you work less.

Leave is the one that catches people out. Going from four weeks to six weeks off moves contractor take-home by about $6,700. That’s not a small swing. It’s also the hidden cost of the “flexibility” you thought you were getting when you went contractor.

Super rate is easy to forget. From 1 July 2025 the Super Guarantee rose to 12%. If you’re employed, you got the increase automatically. If you’re contractor, you have to remember to pay it to yourself, in full, every quarter. Almost nobody gets this right the first year.

Clinic split is the big one. A 60/40 clinic at $220 nets you $132 a session. A 70/30 clinic at the same rate nets $154. That $22 gap, across a full FTE caseload, is about $23,000 a year. That’s the difference between a comfortable contractor income and a public hospital salary.

Running your own version

None of these are your numbers. Your booking rate is a guess. Your session fee depends on your Medicare/private mix. Your tax situation has HECS in it, or private health, or something else that nudges the answer.

The employment calculator runs the comparison on your inputs, using 2024–25 ATO brackets. You get side-by-side take-home, effective hourly rate, and total package for whichever scenario you actually care about: employed, contractor, or own practice. Worth doing before the conversation with your accountant, not after.

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General information only, not financial, tax, or career advice. The scenarios above are illustrative examples using publicly available ATO tax brackets for 2024–25, the Super Guarantee rate at the time of writing, and commonly quoted Australian private-practice benchmarks. Your actual take-home will depend on your session fee, booking rate, Medicare/private mix, HECS, private health, other income, and personal deductions. Confirm numbers specific to you with a registered tax agent or accountant, and check AHPRA, ATO, and MBS Online for current figures before making a decision. Galad Health does not accept liability for decisions made on the basis of this article.