True cost of an employee calculator (Australia)
An employee costs an Australian employer roughly 1.2 to 1.4 times their salary once superannuation at 12%, workers compensation, payroll tax where the business is over its state threshold, and on-costs such as equipment, software and vehicles are added. An $85,000 salary in New South Wales comes to about $107,800 a year, or $64.18 for every productive hour after leave and public holidays.
Total annual employee cost
$107,797.36
- Cost per paid hour
- $54.55
- Cost per productive hour
- $64.18
- Break even rate ex GST
- $85.57
- Charge out rate ex GST
- $122.25
Show breakdown
Calculation breakdown
- Base salary
- $85,000.00
- Hourly rate equivalent
- $43.02
- Superannuation
- $10,200.00
- Workers compensation
- $1,408.96
- Payroll tax marginal
- $5,188.40
- Oncosts — Laptop and phone
- $1,800.00
- Oncosts — Software seats
- $1,500.00
- Oncosts — Training
- $1,200.00
- Oncosts — Vehicle and travel
- $1,500.00
- Oncosts total
- $6,000.00
- Total annual cost
- $107,797.36
- Cost multiple of salary
- 1.27 ×
- Paid weeks
- 52
- Non productive weeks
- 7.8
- Productive hours per year
- 1,679.6
- Cost per paid hour
- $54.55
- Cost per productive hour
- $64.18
- Utilisation
- 75%
- Cost per billable hour
- $85.57
- Charge out rate ex GST
- $122.25
- Charge out rate inc GST
- $134.47
- Break even rate ex GST
- $85.57
| Base salary | $85,000.00 |
|---|---|
| Hourly rate equivalent | $43.02 |
| Superannuation | $10,200.00 |
| Workers compensation | $1,408.96 |
| Payroll tax marginal | $5,188.40 |
| Oncosts — Laptop and phone | $1,800.00 |
| Oncosts — Software seats | $1,500.00 |
| Oncosts — Training | $1,200.00 |
| Oncosts — Vehicle and travel | $1,500.00 |
| Oncosts total | $6,000.00 |
| Total annual cost | $107,797.36 |
| Cost multiple of salary | 1.27 × |
| Paid weeks | 52 |
| Non productive weeks | 7.8 |
| Productive hours per year | 1,679.6 |
| Cost per paid hour | $54.55 |
| Cost per productive hour | $64.18 |
| Utilisation | 75% |
| Cost per billable hour | $85.57 |
| Charge out rate ex GST | $122.25 |
| Charge out rate inc GST | $134.47 |
| Break even rate ex GST | $85.57 |
Includes marginal payroll tax for this hire. Does not include FBT, portable leave levies, business-wide overhead or redundancy provisions.
This employee costs $107,797.36 a year, 1.27 times the base salary. The break-even billable rate is $85.57 ex GST; the entered target margin gives $122.25 ex GST.
Review the payroll tax rules for NSW. Your wages are not included in the link.
PDF for a finished report, Excel for a formatted workbook, CSV for plain data.
At a glance
- Superannuation guarantee
- 12% of ordinary time earnings, capped at the maximum contribution base ($270,830 a year in 2026–27)
- Workers compensation
- enter the premium rate and remuneration basis from your actual policy
- Payroll tax
- applies once total wages pass the state threshold ($1.2M NSW, $1M VIC, $1.3M QLD); taxable wages include super
- Paid non-working time
- 4 weeks annual leave; editable personal-leave and weekday-holiday assumptions
- Productive hours on a 38-hour week
- 1,679.6 in the NSW worked example; adjust leave and holidays for the employee
- Cost per productive hour
- total annual cost ÷ productive hours
How it is calculated
Add salary, superannuation, workers compensation, marginal payroll tax and on-costs. Divide annual cost by productive hours, billable utilisation and one minus the target margin to calculate a charge-out rate.
salary = annual salary, or hourly × hours_per_week × 52
super = min(salary, maximum_contribution_base_annual) × sg_rate
workers_comp = (salary + super) × wc_rate (premiums are rated on remuneration, which includes super)
payroll_tax = tax(state, total_wages) − tax(state, total_wages − salary − super) (0 if total_wages = 0)
using the tool-11 engine; this is the marginal tax this hire causes, and includes super in taxable wages
oncosts = Σ on-cost rows
annual_cost = salary + super + workers_comp + payroll_tax + oncosts
cost_multiple = annual_cost ÷ salary
non_productive_wk = annual_leave_weeks + personal_days ÷ 5 + public_holidays ÷ 5 + other_weeks
productive_hours = (52 − non_productive_wk) × hours_per_week
cost_per_paid_hr = annual_cost ÷ (52 × hours_per_week)
cost_per_prod_hr = annual_cost ÷ productive_hours
cost_per_bill_hr = cost_per_prod_hr ÷ utilisation (break-even charge-out)
charge_out_ex = cost_per_bill_hr ÷ (1 − margin)
charge_out_inc = charge_out_ex × 1.10- Rates as at 2026-09-07 from Superannuation
- Rates as at 2026-09-07 from Workers Compensation Default Rates: state scheme annual reports; verify each · Verification pending
- Rates as at 2026-09-09 from Payroll Tax — NSW
- Rates as at 2026-09-09 from Payroll Tax — VIC
- Rates as at 2026-09-09 from Payroll Tax — QLD
- Rates as at 2026-09-09 from Payroll Tax — WA
- Rates as at 2026-09-09 from Payroll Tax — SA
- Rates as at 2026-09-09 from Payroll Tax — TAS
- Rates as at 2026-09-09 from Payroll Tax — ACT
- Rates as at 2026-09-09 from Payroll Tax — NT
- Rates as at 2026-09-07 from Nes Leave
- Rates as at 2026-09-09 from Public Holidays Count
- Rates as at 2026-09-07 from Gst
What is included in the true cost of an employee?
Everything the business pays because the person is employed. Start with base salary. Add the superannuation guarantee, 12% of ordinary time earnings up to the maximum contribution base. Add workers compensation premium, a percentage of remuneration (wages plus super) set by your actual policy and industry. Add payroll tax if your total Australian wages, including super, exceed your state’s threshold; the calculator compares tax with and without the hire, including any deduction phase-out or levy, to estimate the additional liability. Then add the on-costs: laptop and phone, software licences, a vehicle, uniform and protective equipment, training, and recruitment spread over expected tenure. Leave entitlements are not an extra cost (they are paid within the salary) but they reduce the hours you get, which is the next question.
How many productive hours does an employee work in a year?
The NSW worked example starts with 52 weeks of 38 hours and subtracts 4 weeks of annual leave, 10 assumed personal-leave days and 9 statewide weekday public holidays. That leaves 44.2 weeks, or 1,679.6 productive hours. Adjust personal leave, regional holidays, other absences and the employee’s roster to match your circumstances. Dividing the annual cost by productive hours gives the cost used for job costing and labour pricing; in this example it is about 18% higher than cost per paid hour.
How do you calculate a charge-out rate?
Start from cost per productive hour, divide by the utilisation rate you can achieve (the share of productive hours that end up on an invoice; 70% to 85% for trades, 60% to 75% for consulting), which gives the break-even rate per billable hour, then divide by one minus your target margin. For the worked example, $64.18 per productive hour at 75% utilisation is $85.57 to break even, and a 30% margin makes the charge-out rate $122.25 ex GST, $134.47 inc GST. If you want overhead recovery (rent, admin staff, insurance) built in, add it to the margin or to the on-costs; the calculator’s charge-out page walks through the same figures with the rate first.
Where do these figures come from in an ERP?
From payroll and job costing working together. Payroll carries the salary, super, workers compensation class and payroll tax; the job costing module carries the cost rate per employee (the cost per productive hour from this page) and the charge-out rate per role, so every timesheet line posts a cost and a billable value. When rates change on 1 July, one update on the employee record flows through every quote and job. MYOB Acumatica payroll with project accounting does this for services and construction businesses; for trades, a field service app applies the same rates on the job from a phone.
| Component | Amount |
|---|---|
| Base salary | $85,000.00 |
| Superannuation guarantee 12% | $10,200.00 |
| Workers compensation 1.48% of salary plus super | $1,408.96 |
| Payroll tax (NSW 5.45% on salary + super, business over the threshold) | $5,188.40 |
| On-costs (laptop, phone, software, training, vehicle) | $6,000.00 |
| Total annual cost | $107,797.36 (1.27 × salary) |
| Paid hours (52 × 38) | 1,976 |
| Productive hours (44.2 weeks × 38) | 1,679.6 |
| Cost per paid hour | $54.55 |
| Cost per productive hour | $64.18 |
| Break-even per billable hour at 75% utilisation | $85.57 |
| Charge-out rate at 30% margin | $122.25 ex GST · $134.47 inc GST |
Frequently asked questions
How much does an employee cost on top of salary in Australia?
Typically 20% to 40% on top. Super adds 12%; workers compensation uses your policy rate; payroll tax depends on the state, wage bands and levies; equipment, software and vehicles add other costs. The multiple is higher for lower salaries because on-costs are fixed dollars.
Is payroll tax charged on superannuation?
Yes. Every state and territory includes employer superannuation contributions in taxable wages for payroll tax, so the calculator applies the rate to salary plus super. It compares the annual tax with and without the hire, so threshold reductions, wage bands and levies can change the additional liability.
Should the cost rate in job costing include leave?
Leave is already inside the salary, so do not add it again as a cost. Account for it by dividing the annual cost by productive hours rather than paid hours, which is what this calculator does. That produces a cost per hour about 19% higher than salary ÷ 1,976, and it is the rate that makes job margins true.
What utilisation rate should I use?
The share of productive hours that end up billed, from your own timesheets if you have them. Tradespeople commonly achieve 70% to 85% once travel, quoting and rework are removed; consultants and engineers 60% to 75%; managers who also bill, less. Use your real figure; the charge-out rate is very sensitive to it.
MYOB Acumatica partner in Brisbane
Cost rates and charge-out rates per employee, flowing from payroll into every job and quote, is what job costing inside your ERP does. Ask us about MYOB Acumatica payroll and project accounting.
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