Employer Cost Calculator
See the true cost of employing someone in Australia — super, payroll tax, workers' comp, and FBT included. For FY 2026-27, 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 $1.41 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
$1.41
per $1 employee takes home
Employer Cost Breakdown
Cost per $1 Net
$1.41
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.) | $67,600 | $5,633 | $2,600 | $1,300 |
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 taxable wages once the relevant threshold is exceeded, and the threshold, rate, grouping, interstate-wage and deduction rules differ in every jurisdiction. This calculator provides a proportional estimate for one employee; use the relevant revenue office calculation for a return.
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 and rate structures vary materially
- 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 generally pay 12% super guarantee on ordinary time earnings. The estimate applies the relevant year's maximum contribution base, so SG does not keep increasing indefinitely for very high salaries.
- Payroll tax
- A state or territory tax on taxable wages once the relevant threshold is exceeded. NSW's current base rate is 5.45% above its $1.2 million threshold; several other jurisdictions use tiered rates, tapered deductions or levies. The calculator models the main published structure but remains an estimate.
- 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 taxable non-cash benefits — such as a car, qualifying car parking, entertainment, or salary-packaged items — the employer may pay FBT at 47% on the grossed-up taxable value. Exemptions and valuation rules matter, and 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 FY 2026-27 income tax ($20,220) and Medicare levy ($1,980), the employee takes home roughly $77,800/year if no other adjustments apply.
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 $1.45
- If the business crosses the NSW threshold, the current 5.45% rate and the business's actual taxable-wage deduction need to be included