Cost to Hire Calculator — True Cost to Employ
Work out the real cost to hire someone in Australia. Add super, leave loading, state-specific workers comp + payroll tax, training and recruitment overhead. Plus a contractor-vs-employee comparison so you can pick the cheaper path.
Role details
Your business & on-costs
Used to check the payroll-tax threshold for your state. Below it, payroll tax is $0.
Total annual cost to employ
$98,076.92
1.23× base — 22.6% on-costs on $80,000
Cost / paid hour
$49.63
38h × 52w basis
Cost / hour worked
$58.93
paid leave removed
Your result
True cost to employ a $80,000.00 full-time hire in NSW
$98,076.92/yr (1.23× base)
Breakdown
| Base salary (ordinary rate) | $80,000.00 |
| Superannuation Guarantee @ 12% | $9,600.00 |
| Leave loading (17.5% on 4 weeks AL) | $1,076.92 |
| Workers compensation @ 0.50% (NSW, office) | $400.00 |
| Payroll tax — N/A (payroll below NSW threshold of $1,200,000) | $0.00 |
| Training/onboarding @ 5% | $4,000.00 |
| Equipment / software per head | $2,000.00 |
| Recruitment ($3,000 / 3y) | $1,000.00 |
| Total annual cost to employ | $98,076.92 |
| On-cost multiplier | 1.23× base |
| Overhead above base | 22.6% |
| Effective cost / paid hour (38h × 52w) | $49.63/hr |
| True cost / hour actually worked | $58.93/hr |
Notes
- On-costs add 22.6% to base — the AU rule of thumb is a true cost of about 1.2×–1.3× salary, and higher for high-risk industries or casuals.
- No payroll tax — total payroll is below the NSW tax-free threshold of $1,200,000.00. Most small employers sit under it.
- Workers compensation (0.50%) is indicative — your actual premium depends on your ANZSIC class, claims history and state scheme.
- The "cost per hour worked" removes ~8.2 weeks/year of paid-but-non-productive time (annual leave, personal leave, public holidays).
- Estimate only — super is legislated, leave loading and casual loading come from the modern awards; workers comp and payroll-tax thresholds are sourced per state and were last verified 2026-07-05.
Compared to engaging a contractor
Contractors typically invoice 1.5× the equivalent employee hourly rate to cover their own super, leave, workers comp and business overhead. We've assumed 46 billable weeks/year (6 weeks unbilled) and a 1.5× markup. Indicative only.
Employee TCO
$98,076.92
Contractor (1.5× @ 46wk)
$106,156.04
$60.73/hr invoice
Employee is cheaper
+$8,079.12 per year
For ongoing labour, employment usually wins on TCO. For genuine project work or specialist skills, contracting often wins. The bigger risk: sham contracting under the 2024 Closing Loopholes reforms — courts now apply a substance-over-form test. Use the Contractor-or-Employee classifier to confirm the relationship is genuinely commercial before going contractor.
Sources
- • Super Guarantee 12% from 1 July 2025 — ATO. Casual loading 25% + leave loading 17.5% — modern awards (most awards set both; the Fair Work Act preserves a leave loading only where an award or agreement provides it).
- • Workers comp: indicative state-scheme industry averages (icare NSW, WorkSafe Vic, WorkCover QLD, ReturnToWorkSA, WorkCover WA, WorkSafe Tas, ACT, NT) — 2025-26/2026-27. Enter your own rate for accuracy.
- • Payroll tax thresholds + rates: each state Revenue Office, FY2026-27 (incl. ACT's 1 Jul 2026 change to 6.75% / $1.75M, and Tasmania's 6.1% rate above $2M).
- • Last verified 5 July 2026 — re-check before relying on this for material decisions.
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