How the Employee Cost Calculator Works (With a Worked Example)
Estimates the full cost of employing someone, including super and on-costs. This guide walks through what each input means, the formula behind the answer and a worked example using typical Australian figures. You can follow along in the free Employee Cost Calculator.
Why it matters
Australian businesses deal with GST at 10%, BAS reporting, PAYG withholding for staff, super guarantee obligations and company or individual tax depending on structure. Getting pricing and margins right is the difference between busy and profitable.
What you need to enter
The calculator asks for 5 inputs. The table shows each one with the example value used later in this guide.
| Input | Example value |
|---|---|
| Salary ($) | 80000 |
| Super guarantee (%) | 12 |
| Workers compensation (%) | 1.5 |
| Payroll tax (%) | 0 |
| Other on-costs ($) | 2000 |
The formula
Cost = salary × (1 + super + workers comp + payroll tax rates) + other costs.
Worked example
Entering the example values above gives these results:
| Result | Value |
|---|---|
| Total cost of employee | $92,800.00 |
| Per week | $1,784.62 |
| On-costs above salary | $12,800.00 |
The headline figure is $92,800.00 (total cost of employee). Change any input in the calculator and every result updates instantly, so you can test different scenarios side by side.
How the total cost of employee changes with salary
The table below keeps every other input at the example value and moves only “Salary ($)” up and down by 10% and 20%. It shows how sensitive the total cost of employee is to that one figure.
| Salary ($) | Total cost of employee |
|---|---|
| 64,000 | $74,640.00 |
| 72,000 | $83,720.00 |
| 80,000 | $92,800.00 |
| 88,000 | $101,880.00 |
| 96,000 | $110,960.00 |
At 64,000 the result is $74,640.00; at 96,000 it is $110,960.00. 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 practical tip
Payroll tax only applies once your wages pass your state’s threshold. Rates and thresholds differ by state.
Keep going
Before relying on the number, read Getting the Most From a Employee Cost Calculator: Tips and Common Errors. You might also find these guides useful:
- Discount Calculator: Formula, Example and What the Result Means
- Using a Depreciation Calculator in Australia: A Step-by-Step Guide
- Cash Runway Calculator Explained for Australians
Frequently asked questions
- When do I need to register for GST?
- When your annual GST turnover reaches $75,000, or $150,000 for non-profits. Taxi and ride-share drivers must register regardless of turnover.
- What company tax rate applies?
- 25% for base rate entities with turnover under $50 million, and 30% for other companies.
- Should I talk to an accountant?
- Yes, for structure, tax planning and compliance. These calculators give quick estimates only.
Run your own numbers in the Employee Cost Calculator.
Open the calculatorGeneral information only. Rates and thresholds change, usually on 1 July. Confirm current figures with the ATO or the relevant authority, and get personal advice for decisions about your situation.