The employee cost calculator
Enter the employee's pay and your settings. Everything updates as you type, and the defaults are a typical full-time employee on 38 hours a week. Nothing you enter is stored or sent anywhere.
Estimates only, based on the assumptions you enter. Award entitlements, penalty rates, overtime and allowances vary. Check your award with the Fair Work Ombudsman and confirm rates with your State Revenue Office and insurer.
Want these numbers built into your payroll and pricing properly? True Tally runs award-accurate payroll and helps businesses price for profit. Book a free call.
Employee on-costs in Australia: what's included
Employee on-costs are everything you pay to employ someone beyond their base wage. Some are set by law, some by the award or agreement, and some depend on your business. These are the ones the calculator includes.
| On-cost | Typical amount | Who sets it |
|---|---|---|
| Superannuation guarantee | 12% of ordinary time earnings | Federal law (ATO) |
| Annual leave | 4 weeks paid a year (5 for some shift workers) | National Employment Standards |
| Annual leave loading | Often 17.5% of annual leave pay | Award or agreement |
| Personal and carer's leave | 10 days a year entitlement | National Employment Standards |
| Public holidays | About 10 to 12 workdays a year, paid but not worked | State and federal public holiday laws |
| Workers compensation insurance | Often about 1% to 5% of wages, higher in high-risk industries | State insurance schemes |
| Payroll tax | From 1.2125% (regional Victoria) to 6.85%, on wages above the threshold | State and territory revenue offices |
| Portable long service levies | Often 1% to 3% of wages, in covered industries only | State schemes (some industries only) |
| Equipment, software, training | Varies | Your business |
Payroll tax only applies once your total Australian wages pass your state's tax-free threshold, which ranges from $1 million to $2 million. See our payroll tax by state comparison for each state's threshold and rate.
Worked example: a full-time employee on $35 an hour
Using the calculator's default settings (full-time, 38 hours a week, Victoria, 4 weeks annual leave with 17.5% loading, 10 public holidays, 5 personal leave days taken, 1.5% workers compensation, no payroll tax and $1,500 of other costs):
| Item | Annual amount |
|---|---|
| Base salary ($35 x 38 hours x 52 weeks) | $69,160 |
| Annual leave loading (17.5% of 4 weeks' pay) | $931 |
| Superannuation (12%) | $8,411 |
| Workers compensation (1.5%) | $1,051 |
| Other costs | $1,500 |
| Total cost per year | $81,053 |
| Hours actually worked (after leave and public holidays) | 1,710 |
| Cost per hour worked | $47.40 |
| Cost per billable hour (80% billable) | $59.25 |
Why the per-hour cost matters more than the annual cost
Most employee cost calculators stop at the annual figure. In the example above, that figure is about 17% above the salary, which sounds manageable. But a permanent employee's salary already includes paid annual leave, public holidays and personal leave, which are hours you pay for but don't get worked. Spread the full cost over the hours actually worked and the employee costs $47.40 an hour, about 35% more than their $35 hourly rate.
That per-hour number is the one that matters for pricing, quoting and deciding whether a new hire will pay for itself. And once you allow for non-billable time like travel, admin and training, the cost per billable hour climbs again, to about $59 in the example.
Casual vs permanent: which costs more?
Casual employees receive a 25% loading instead of paid leave and public holidays, so they look more expensive per hour but cheaper per year. In practice the cost per hour worked is often similar. With the calculator's defaults, a casual on a $35 base rate working 38 hours for 48 weeks costs about $50.50 per hour worked, compared with about $47.40 for a full-time employee on the same base rate.
Casual employment can still be the right choice for irregular or seasonal work. But if a casual works a regular, predictable pattern, remember they may be able to notify you that they want to become permanent, after six months (or 12 months with a small business employer). Switch the employment type in the calculator to compare.
Payday Super and your cash flow
Since Payday Super started on 1 July 2026, super must reach each employee's fund within seven business days of payday, not quarterly. The total cost hasn't changed, but the timing has: super now leaves your account every pay cycle. The calculator shows the super you'll pay each fortnight so you can plan for it. If your cash flow was relying on quarterly super, read our Payday Super guide.
Using your cost to set a charge-out rate
If you bill clients for your team's time, price from the cost per billable hour, not the wage. In the example, an employee on $35 an hour costs about $59 per billable hour. Charge them out at $60 and you're covering little more than their cost, before rent, vehicles, software and your own wage. The calculator's suggested charge-out rate adds your target margin on top of the true cost.
For pricing your own services, try our service pricing calculator, and see our guide to improving profit margins.
Cite this calculator
This calculator and its worked example are free to quote, screenshot or link to for editorial and educational use, with a link back to this page. Suggested citation:
True Tally Bookkeeping, “Employee Cost Calculator: What an Employee Really Costs in Australia”, https://www.truetally.com.au/employee-cost-calculator
Sources and method
The calculator uses the 12% super guarantee rate set by the ATO, leave entitlements from the National Employment Standards published by the Fair Work Ombudsman, and 2025-26 payroll tax rates from each State Revenue Office (see our payroll tax by state table).
Method: for permanent employees, annual wages are the hourly rate x hours x 52 weeks, plus leave loading on annual leave if selected. Super and workers compensation are calculated on wages, and payroll tax on wages plus super. Hours worked exclude annual leave, public holidays and personal leave taken. For casuals, wages include the 25% loading for the weeks worked, with no paid leave. Cost per billable hour divides cost per hour worked by the billable share, and the suggested charge-out rate is that cost divided by (1 minus your target margin). Overtime, penalty rates and allowances are not included, because they depend on your award and roster.
This page is general information, not financial or tax advice. It's maintained by True Tally Bookkeeping, a Registered BAS Provider (26360186), and was last reviewed in October 2026.
Frequently asked questions
How much does an employee really cost in Australia?
On top of wages, Australian employers pay the 12% super guarantee, workers compensation insurance, payroll tax once wages pass the state threshold, and often leave loading, levies and equipment. For a full-time employee on $35 an hour, those costs bring the annual total to about $81,000 against a $69,160 salary, around 17% more. Because paid leave and public holidays are not worked, the cost per hour actually worked is about $47.40, around 35% above the hourly rate.
What are employee on-costs?
Employee on-costs are the costs of employing someone beyond their base wage. In Australia they typically include superannuation (12% of ordinary time earnings), paid annual, personal and public holiday leave, leave loading where the award or agreement requires it, workers compensation insurance, state payroll tax above the threshold, portable long service levies in some industries, and equipment, software and training.
What is the super guarantee rate in 2026?
The super guarantee rate is 12% of ordinary time earnings, the rate that has applied since 1 July 2025. Since Payday Super started on 1 July 2026, super must reach each employee's fund within seven business days of payday rather than quarterly.
Is a casual employee cheaper than a permanent employee?
Not usually per hour. Casuals receive a 25% casual loading instead of paid leave, so their cost per hour worked is often similar to or higher than a permanent employee's. Using the calculator's default assumptions, a casual on a $35 base rate costs about $50.50 per hour worked, compared with about $47.40 for a full-time employee on the same base rate. Casuals can still suit businesses with irregular demand.
Is super included in payroll tax?
Generally yes. In every Australian state and territory, employer superannuation contributions are included in taxable wages for payroll tax. Payroll tax only applies once a business's total Australian wages exceed its state threshold, and related businesses may be grouped and share one threshold.
How do I work out a charge-out rate for an employee?
Start with the employee's true cost per billable hour, not their wage. Divide their total annual cost by the hours they actually work, then divide again by the share of those hours that can be billed. Then add your overheads and profit. A full-time employee on $35 an hour who is 80% billable costs about $59 per billable hour, so a $60 charge-out rate barely covers their cost.