Payroll On-Cost Calculator Australia

What payroll on costs are and why they matter

Payroll on costs are every dollar an Australian employer pays above the advertised salary, and they are the single most common reason a hiring budget blows out. A role signed off at ninety thousand dollars rarely costs ninety thousand dollars. Superannuation, leave loading, workers compensation and state payroll tax all sit on top, and none of them appear in the offer letter.

This calculator adds them up. You enter the base salary, the state where the work is performed, your total Australian wage bill and your workers compensation rate, and it returns the full annual cost of employment, the on-cost percentage, and a cost per hour you can use when quoting work.

The superannuation guarantee

Super is the largest single on-cost for most employers. It is charged as a percentage of ordinary time earnings and paid into the employee's fund on top of salary, not out of it.

Two details change the number. First, ordinary time earnings is a narrower base than gross pay: overtime is generally excluded, and so is annual leave loading in most arrangements, because the loading compensates for a lost opportunity to work overtime rather than forming part of ordinary hours.

Second, there is a maximum contribution base. Above a set quarterly level of earnings the employer is not required to contribute more, which caps super for high earners. The calculator applies that cap automatically, so a two hundred and eighty thousand dollar salary does not show an uncapped super figure.

Annual leave loading

Many modern awards and enterprise agreements require an extra loading on ordinary pay while an employee is taking annual leave. It is normally seventeen and a half per cent, applied to the weeks of leave actually taken.

It is small in percentage terms but easy to forget. Four weeks of leave at a seventeen and a half per cent loading works out at roughly one and a third per cent of annual salary. Tick the box only if your award, agreement or contract actually requires it; a large share of salaried professional staff are not entitled to leave loading at all.

Workers compensation

Every state and territory runs its own workers compensation scheme, and every scheme prices premiums from an industry classification. An accounting practice and a scaffolding contractor face rates that differ by an order of magnitude, and larger employers are further adjusted by their own claims history.

Because there is no single national rate to look up, the tool asks you for yours. Take it from your policy schedule or your renewal notice. If you are budgeting for a business you have not started yet, your scheme's published industry rate table is the right starting point. Note that the premium is charged on remuneration, which in most schemes includes superannuation, so the calculator applies your rate to salary plus loading plus super rather than salary alone.

How state payroll tax changes the answer

Payroll tax is where the biggest differences between employers appear, and the source of most of the confusion.

It is a state tax with a state threshold. The threshold applies to the employer, or to the whole group of related employers, not to each employee. Below it you pay nothing at all. Above it, the tax applies to the wages over the threshold, which means the threshold has already been consumed by your existing staff and every extra hire is taxed at the full marginal rate.

That is why this calculator asks for your total annual Australian wages as well as the salary of the person you are costing. A small business at eight hundred thousand dollars of wages adds a new employee with no payroll tax at all. The same hire at a business paying five million dollars in wages attracts the full state rate on their entire wages base, including their super.

Thresholds and rates vary considerably between jurisdictions, and several states layer on extras: Victoria has a reduced rate for regional employers and a mental health surcharge for very large payrolls, Queensland has a mental health levy and a higher rate tier, and Western Australia phases its threshold out as the wage bill grows. The regional Victoria option and the surcharge field let you reflect those in the estimate.

Reading the results

The headline figure is the total annual cost of employment. Underneath it, the on-cost percentage tells you how much the salary is being multiplied by, the number to keep in your head when you are budgeting a team rather than a person.

Two hourly figures are shown. The cost per ordinary hour divides the total by full-time hours across a whole year. The cost per productive hour divides it by the weeks the employee is actually available after leave, public holidays and training, and it is always the higher of the two. If you sell your team's time, the productive figure is the floor your chargeout rate has to clear before you have earned anything.

Using the figure in a hiring decision

Once you have a real number, three decisions get easier. You can compare a salaried hire against a contractor day rate on equal terms. You can see whether crossing your state's payroll tax threshold makes the next hire materially more expensive than the last one. And you can set a chargeout rate or a project budget that survives contact with the actual payroll.

All rates and thresholds used here come from the ATO, the Fair Work Ombudsman and the state revenue offices, and update as those sources change.

This calculator produces an estimate for budgeting purposes and is not financial, tax or legal advice. Grouping rules, exemptions and award entitlements can change your real position, so confirm anything material with your accountant or the relevant state revenue office.

About This Tool: Payroll on Costs

Payroll on costs: use this tool to get an instant, accurate estimate. The figures follow official ATO guidance and every rate and threshold is kept up to date for 2026. Adjust the inputs above to match your situation, or browse all our calculators to plan your next step.