Getting the Most From a Employee Cost Calculator: Tips and Common Errors

Updated 25 August 2026 · Business and gst

A Employee Cost Calculator gives a fast answer, but the answer is only as good as what goes in. These are the mistakes we see most often with employee cost calculations in Australia, and how to avoid them.

1. Mixing up margin and markup

A 50% markup is a 33% margin. Pricing with the wrong one can erase profit.

2. Spending GST collected

GST belongs to the ATO. Keep it aside until your BAS is due.

3. Undercharging as a contractor

Your rate must cover super, leave, unbilled time and business costs, not just the salary you want.

4. Forgetting on-costs

An employee costs well above their salary once super, workers comp and payroll tax are included.

5. Overlooking the detail that matters most here

Payroll tax only applies once your wages pass your state’s threshold. Rates and thresholds differ by state.

How the total cost of employee changes with super guarantee

A common mistake is getting one input slightly wrong. Here is what happens to the total cost of employee when “Super guarantee (%)” is off by up to 20% in either direction, with everything else held steady.

Super guarantee (%)	Total cost of employee
10	$91,200.00
11	$92,000.00
12	$92,800.00
13	$93,600.00
14	$94,400.00

At 10 the result is $91,200.00; at 14 it is $94,400.00. If a small change in this input moves the answer a lot, it is worth double-checking that figure before you rely on the result.

A quick sense check

Cost = salary × (1 + super + workers comp + payroll tax rates) + other costs. With typical inputs the calculator returns total cost of employee of $92,800.00. If your own result looks wildly different, check that each figure is in the right unit and period (weekly, monthly or yearly) before drawing conclusions.