Employer Cost Calculator
See the true cost of employing someone in Australia — super, payroll tax, workers' comp, and FBT included. For FY 2025-26 and FY 2024-25.
Employment Details
An employee on $85,000 gross actually costs you
$95,625
per year ($7,969/month) — that's $1.43 for every $1 they take home
Your estimated total payroll ($425,000) is below the New South Wales payroll tax threshold — no payroll tax applies.
Total Employer Cost
$95,625
$7,969/month
Gross Salary
$85,000
$7,083/month
Super Guarantee
$10,200
$850/month
Payroll Tax
$0
Below threshold
Workers' Comp
$425
$35/month
Cost-to-Net Ratio
$1.43
per $1 employee takes home
Employer Cost Breakdown
Cost per $1 Net
$1.43
employer cost per $1 employee take-home
Full Cost Breakdown
| Component | Annual | Monthly | Fortnightly | Weekly |
|---|---|---|---|---|
| Gross Salary | $85,000 | $7,083 | $3,269 | $1,635 |
| Super Guarantee | $10,200 | $850 | $392 | $196 |
| Payroll Tax | $0 | $0 | $0 | $0 |
| Workers' Comp | $425 | $35 | $16 | $8 |
| Total Employer Cost | $95,625 | $7,969 | $3,678 | $1,839 |
| Employee Take-Home (est.) | $67,012 | $5,584 | $2,577 | $1,289 |
Employer Cost Calculator: The True Cost of Hiring in Australia
How it works
When you hire someone on a $85,000 salary, you don't just pay $85,000. On top of the gross wage, employers are liable for superannuation guarantee (currently 12%), payroll tax (if your total payroll exceeds the state threshold), workers' compensation insurance, and potentially fringe benefits tax on any non-cash benefits.
This calculator adds up every mandatory and common cost component to give you the true annual cost of employing one person. It then estimates the employee's take-home pay so you can see the ratio: for every dollar that actually lands in your employee's bank account, how much are you spending in total?
Payroll tax is the component that surprises most employers. It's a state tax on your total wages bill (including super) once you exceed a threshold — and the threshold, rate, and rules differ in every state and territory. A business with $2M in total payroll in NSW will owe payroll tax, but the same payroll in the ACT would be below the threshold. This calculator handles the proportional allocation so you can see each employee's share of the liability.
When to use this calculator
- You're budgeting for a new hire and need to know the all-in cost, not just the advertised salary
- You're comparing the cost of hiring in different states — payroll tax thresholds vary from $900k (VIC) to $2M (ACT)
- You want to show a board or manager the gap between salary and total employment cost
- You're deciding between an employee vs contractor and want to compare the employer-side costs
- You're evaluating whether offering a fringe benefit (car, laptop, car parking) is cost-effective after FBT
- You need to estimate workers' compensation premiums for budgeting or quoting purposes
Key concepts
- Super guarantee (SG)
- Employers must pay superannuation on top of an employee's ordinary time earnings. The rate is 12% for FY 2025-26 (up from 11.5% in FY 2024-25). Super is calculated on the gross salary and paid into the employee's nominated super fund. It's a direct addition to the employer's cost but doesn't appear in the employee's take-home pay.
- Payroll tax
- A state/territory tax on total wages (including super) once your payroll exceeds a threshold. Each state sets its own threshold and rate — for example, NSW charges 5.5% on payroll above $1.2M, while SA charges 4.5% above $1.5M. Small businesses with low total payroll often pay no payroll tax at all. The tax applies to the business, not the individual employee.
- Workers' compensation insurance
- Compulsory insurance that covers employees for work-related injuries and illnesses. The premium is calculated as a percentage of wages and varies dramatically by industry — an office worker might cost 0.5% of wages, while a construction worker could cost 3.5% or more. The exact rate depends on the insurer, the employer's claims history, and the specific occupation classification.
- Fringe benefits tax (FBT)
- If you provide non-cash benefits to employees — such as a car, car parking over $10,612/year, entertainment, or salary-packaged items — the employer pays FBT at 47% on the grossed-up taxable value of those benefits. FBT is separate from income tax and is paid by the employer, not the employee. The FBT year runs from 1 April to 31 March.
- Cost-to-net ratio
- This metric shows how much the employer spends in total for every $1 the employee actually takes home after income tax. A ratio of $1.65 means the employer pays $1.65 for every $1 of take-home pay. The ratio increases with salary (higher marginal tax rates widen the gap) and with additional employer costs like payroll tax and FBT.
Worked example — Hiring a $100k office worker in NSW
Sarah runs a marketing agency in Sydney with 8 employees and a total payroll of $750,000. She's about to hire a new content manager at a gross salary of $100,000. She wants to know the true cost.
Step 1 — Super guarantee (12%):
$100,000 × 12% = $12,000 per year
Step 2 — Payroll tax:
New total payroll = $750,000 + $100,000 = $850,000 With super: $850,000 × 1.12 = $952,000 NSW threshold: $1,200,000
$952,000 is below the NSW threshold, so payroll tax = $0
Step 3 — Workers' compensation (office: 0.5%):
$100,000 × 0.5% = $500
Step 4 — Total employer cost:
| Component | Annual | Monthly |
|---|---|---|
| Gross salary | $100,000 | $8,333 |
| Super guarantee | $12,000 | $1,000 |
| Payroll tax | $0 | $0 |
| Workers' comp | $500 | $42 |
| Total employer cost | $112,500 | $9,375 |
Step 5 — Employee take-home estimate:
After income tax ($22,967) and Medicare levy ($2,000), the employee takes home roughly $75,033/year.
What this tells Sarah:
- The new hire costs $112,500 per year — 12.5% more than the headline salary
- For every $1 the employee takes home, Sarah pays about $1.50
- If her business grows and total payroll crosses $1.2M, payroll tax will add another ~5.5% on the overshoot — planning for that now avoids a budget surprise
Employer Cost Calculator FAQ
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