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contractors or consultants among the fastest growing group. Long Service Leave
Base Salary Salary Continuance
Ultimately, the hourly rate charged depends on the market Professional Indemnity
Termination/Redundancy
for the service provided and there is no substitute for
specific knowledge of the particular industry and the value
Any travel costs and workers compensation would be on
of the service being offered to a client, but these rates can
top of these rates, and it may be necessary to factor in an
be used as a benchmark to ensure that contractors don’t additional charge to cover legal and accounting fees. Care
undercharge for their services. should also be taken to allow for rising professional
These hourly rates should be read in conjunction with indemnity insurance premiums. ASIC fees may also need
Professionals Australia’s Standard Terms of Engagement and to be covered depending on the particular business entity
Professionals Australia’s Guide to Writing Contracts for or structure the consultant or contractor has in place.
Independent Contractors and Consultants. Both documents
take account of important issues arising from changes to If the contract engineer is engaged on a short-term basis,
Personal Services Income rules effective July 2000. The a further factor should be included to allow for the time
changes will potentially impact on contractors and and overheads involved in seeking contracts. A factor of
consultants engaged on an hourly basis. These documents 20% would not be unreasonable for this purpose. The
are available to members from Professionals Australia’s hourly rate should then be based on 1000 hours.
website at www.professionalsaustralia.org.au.
Using the formula described here, a contract engineer
The hourly rate for contract engineers takes into account seeking a salary equivalent of say $100,000 per annum
the conditions of employment which apply to employee would calculate the hourly fee as follows:
professional engineers, as contract professional employees
must meet this cost themselves. Short-term contract $100,000/1000 hours = $100.00 p/h
Professional engineer employees have access to the Long-term contract $100,000/1210 hours = $82.65 p/h
Australian Industrial Relations Commission and receive
annual leave, sick leave, paid public holidays, long service Market Rates
leave, superannuation, jury leave, compassionate leave, The survey found little change in prevailing market rates
family leave, professional development and retrenchment/ with a median hourly rate of pay for short-term contractors
redundancy provisions. of $125 compared to $115 for long-term contractors. These
rates do not include GST.
The contract engineer may be engaged on an hourly basis
and generally does not have access to these provisions.
SHORT TERM ($ p/h) LONG TERM ($ p/h)
The contract engineer must take such provisions into
account when determining the hourly fee to be charged. Level 1 50-70 50-60
Based on a 38 hour week, the hourly fee is calculated Level 2 75-100 75-95
using a 1980 hour year (i.e. 38 hours by 52.1 weeks) and Level 3 90-125 90-120
deducting from the year the following factors: Level 4 120-150 105-125
Level 5 150-200 125 -175
Public Holidays 12 days 92 hours
Annual Leave 20 days 152 hours
Long Service Leave 4.3 days 33 hours Contract Agency Rates
Sick Leave 10 days 76 hours
If the contract engineer is engaged through a contract
Salary Continuance 3% 60 hours
Superannuation 10% 198 hours agency, some components such as workers compensation/
Prof. Indemnity (inc public liability) 3% 60 hours disability insurance and superannuation contributions
Misc. leave (family, jury, etc) 3 days 23 hours would normally be paid for by the agency. These
Professional Development 5 days 38 hours components would then be removed from calculations.
Termination/Redundancy 5 days 38 hours The result would be to increase the number of hours upon
TOTAL 770 hours which an hourly calculation is based. A typical calculation
made by a contract agency might see the annualised hours
rise to around 1600, so that the hourly rate for an equivalent
Thus the hourly rate should be calculated on the basis of $100,000 employee salary would be $100,000/1600 hours
about 1210 hours (1980 - 770). = $62.50 per hour.
118 June 2015 Professional Engineer Remuneration Survey Report © Professionals Australia
APPENDIX A – SURVEY QUESTIONNAIRE
LEVEL 2 Professional Engineer The professional engineer supervises a group or groups including
professional engineers and other staff, or exercises authority and
Classification Level definition technical control over a group of professional staff, in both instances
Following development through Level 1 he/she is an experienced engaged in complex engineering applications.
engineer (as defined) who plans and conducts professional engineering
work without detailed supervision, but with guidance on unusual features
and who is usually engaged on more responsible engineering assignments
requiring substantial professional experience. LEVEL 5 Professional Engineer
126 June 2015 Professional Engineer Remuneration Survey Report © Professionals Australia