AU Employee True Cost Calculator
Discover what an employee really costs your Australian business — beyond the base salary. Includes superannuation, payroll tax, workers compensation, leave entitlements, and training costs. All calculations run privately in your browser.
What Is the True Cost of an Employee in Australia?
Most employers focus only on the advertised salary when budgeting for a new hire. But in Australia, the true cost of an employee includes compulsory superannuation contributions, payroll tax (once your wages bill exceeds the state threshold), workers compensation insurance, and leave entitlements. These on-costs typically add 20–35% on top of base salary, meaning a $80,000 salary role costs an employer closer to $95,000–$108,000 per year.
Superannuation: From 1 July 2024, the Superannuation Guarantee rate is 11.5% of Ordinary Time Earnings (rising to 12% on 1 July 2025). This is compulsory for all employees earning over $450/month (threshold removed as of 2022 — now all employees qualify regardless of earnings).
Payroll Tax by State (2024–25)
Payroll tax is levied by state governments on the wages you pay above a set threshold. Rates and thresholds vary: NSW charges 5.45% on wages above $1.2 million; Victoria charges 4.85% above $700,000; Queensland charges 4.75% above $1.3 million; Western Australia charges 5.5% above $1 million; South Australia charges 4.95% above $600,000. Small businesses under the threshold pay zero payroll tax. This calculator applies the marginal rate to the individual salary to give you an indicative contribution, but your actual liability depends on your total wages bill.
Workers compensation insurance is another compulsory on-cost. Rates depend on your industry classification and claims history. Office workers typically attract rates of 0.3–0.7% of gross wages, while construction and trades can reach 3–6% or more. The rates shown in this calculator are indicative averages.
Leave and Other On-Costs
Under the National Employment Standards (NES), full-time employees are entitled to 4 weeks of paid annual leave, 10 days of personal/carer's leave, and 2 days of compassionate leave. Many awards also include an annual leave loading of 17.5% applied when leave is taken. Long service leave (typically 8.6 weeks after 10 years in most states) creates a further accrual cost. Together, these entitlements represent approximately 10–15 days of salary per year in accrual costs.
Don't overlook indirect costs: recruitment fees (typically 10–20% of first-year salary), onboarding time, laptop and software licences, desk space, professional development, and management overhead. For a comprehensive picture, add these to your calculation or use the equipment and training fields above.
Contractor vs Employee Comparison
Understanding the true cost of employment helps you compare engaging an employee versus a contractor. Contractors charge higher hourly rates but the employer avoids superannuation, payroll tax, workers comp, and leave costs. The true cost threshold is typically around 1.2–1.4× the employee's hourly equivalent. If a contractor charges more than 1.4× the comparable employee rate, employment may be more cost-effective long term — particularly for ongoing, full-time roles.