Guide
Employee on-costs in Australia: what to add to a salary
Updated
What is an on-cost? Anything you pay because someone is employed, over and above the wage itself. Some are statutory and precise, others are real but only estimable.
The statutory on-costs
- Superannuation guarantee
- 12% of qualifying earnings for 2026-27, capped at the $270,830 annual maximum contribution base. See our super guarantee guide.
- Payroll tax
- Only above your state threshold, then a state rate on the excess including superannuation. See our payroll tax guide.
- Workers compensation
- Compulsory in every state and territory, bought from an authorised insurer, priced on your industry classification and claims history (business.gov.au).
- Fringe benefits tax
- 47% of the grossed-up value of benefits, for the FBT years ending 31 March 2023 to 31 March 2027, on an FBT year running 1 April to 31 March (ATO). Zero if you provide no fringe benefits.
The on-costs nobody invoices you for
These are genuine costs, but no official source publishes a rate for them, so we describe what drives each one rather than quoting a figure we cannot support.
| Factor | Why it moves your cost | What to check |
|---|---|---|
| Paid leave cover | Paid annual leave, public holidays and personal leave are all paid time when nobody is producing. In a small team you either cover it or lose the output. | Your award or agreement, and whether annual leave loading applies to the leave you pay. |
| Award penalties and allowances | Where an award or registered agreement covers the role, weekend, evening and overtime rates come from that instrument rather than from the contract. | Find your award through the Fair Work Ombudsman and read its pay clauses before setting a budget rate. |
| Industry classification | Workers compensation premiums are priced on the risk of the work, so the same salary carries a very different premium in an office and on a site. | The classification on your current policy, and whether it still matches what your people actually do. |
| Equipment, software and space | A desk role carries a laptop, licences, a phone and a share of rent; a field role carries a vehicle, tools and personal protective equipment. | Annualise the real invoices you already hold rather than using a rule of thumb. |
| Recruitment and turnover | Agency fees and the productivity gap of a new starter are usually the largest hidden line, and they scale with how often the role turns over. | Your own cost per hire over the last two years, spread across expected tenure. |
Worked example: a $90,000 hire
| Line | Annual cost |
|---|---|
| Gross salary | $90,000 |
| Superannuation guarantee (12%) | $10,800 |
| Statutory subtotal | $100,800 |
| Payroll tax at 5.45% on wages plus super (NSW, above threshold) | $5,494 |
| Total if payroll tax applies | $106,294 |
Both totals come from this site's own calculator formulas. The second row applies only if your total Australian wages are above the New South Wales threshold of $1,200,000; below it, payroll tax is zero and the answer is $100,800.
Add your workers compensation premium rate and your equipment budget in the calculator to get the number you can actually put in a forecast.