Free employer cost calculator for Australian businesses. See the true total cost of hiring an employee beyond their base salary. Includes superannuation guarantee, payroll tax (state-based thresholds), workers compensation estimates, annual leave, sick leave, and other on-costs.
Varies by industry: office ~1.5%, trades ~3-5%
Total Cost per Employee
$0
$0/month
On-Costs
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0.0% above base salary
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The true cost of an employee in Australia is typically 20–30% higher than their base salary once you add compulsory super contributions, payroll tax, workers compensation insurance, and leave entitlements. Many small business owners budget only for the base salary and underestimate these on-costs.
True cost = base salary + Super Guarantee + payroll tax + workers comp + leave provisions. Expressed as rates: super is 12% of ordinary time earnings (FY 2025-26); payroll tax applies only to the share of total wages above your state threshold (for example NSW 5.45% over $1.2M); workers comp is your industry premium rate (commonly 1–5% of wages); and leave provisions cover 4 weeks annual leave, 10 days paid personal/sick leave, and accruing long service leave.
Take an office-based employee on an $85,000 base salary in FY 2025-26 with no payroll tax (the business is below the state threshold) and a 1.5% workers comp rate:
That totals roughly $107,975 — about 27% above the base salary, or close to $9,000 per month. If the business were over its state payroll tax threshold, the employee's proportional share of payroll tax would add to this figure.
At minimum, every employer must pay Superannuation Guarantee (12% from 1 July 2025, up from 11.5% in FY 2024-25 — this is the final legislated rate) and workers compensation insurance (varies by industry and state). If your total wage bill exceeds your state's payroll tax threshold, you'll also pay payroll tax on the excess.
Beyond the direct costs, consider: recruitment and onboarding costs, training and professional development, equipment and workspace, IT systems and licenses, and management time. These can add another 15-25% to the total cost of employment.
The true cost of an employee is typically 20-30% more than their base salary. On top of the salary, employers pay Super Guarantee (12% from 1 July 2025 — the final legislated rate), payroll tax (if total wages exceed the state threshold), workers compensation insurance (typically 1-5% of wages depending on industry), and provisions for annual leave, sick leave, and long service leave. As a rough rule, multiply the base salary by about 1.25 for a quick estimate.
Add four on-costs to the base salary: (1) Super Guarantee at 12% of ordinary time earnings, (2) payroll tax on the share of total wages above your state threshold, (3) workers compensation insurance at your industry premium rate, and (4) leave provisions for annual, personal/sick, and long service leave. For example, an $85,000 salary plus $10,200 super, ~$1,275 workers comp at 1.5%, and roughly $11,500 in leave provisions comes to about $108,000 before any payroll tax.
Payroll tax is a state/territory tax on wages paid by employers. It applies only when your total Australian wages exceed the state threshold, and only the wages above the threshold are taxed. Each state sets its own threshold and rate — for example Victoria taxes wages above $900,000 at 4.85%, while NSW taxes wages above $1.2M at 5.45%. Many small businesses fall below the threshold and pay no payroll tax.
Workers compensation (WorkCover) is compulsory insurance covering employees injured or made ill through work. The premium is a percentage of your wages set by your state scheme and industry classification — office-based businesses typically pay around 1-2% of wages, while construction, trades, or mining can pay 3-5% or more.
Yes. While leave is not a direct cash outflow each period, the entitlements are a real liability. Under the National Employment Standards, full-time employees accrue 4 weeks annual leave, 10 days paid personal/sick leave, and long service leave over time. These must be paid when the employee takes leave or when employment ends, so they belong in the true cost of employment.
Sources & methodology
This calculator adds the FY 2025-26 Super Guarantee (12% from 1 July 2025), your state/territory payroll tax on the share of wages above the relevant threshold, your entered workers compensation rate, and optional annual, sick, and long service leave provisions to the base salary. All figures are computed in your browser using current ATO and state revenue office rates and thresholds — nothing you enter is stored or sent to a server.
Authoritative sources
Reviewed by Bishal Shrestha — Founder of OneBookPlus, 10+ years building tools with Australian tax-agent and BAS-agent practices. Last reviewed and updated: May 2026.
Disclaimer: This calculator produces estimates only and is not tax advice. Tax outcomes depend on your individual circumstances. For decisions that affect your tax position, consult a registered tax agent or the ATO directly.
OneBookPlus handles invoicing, GST tracking, BAS prep, and ATO lodgement automatically.