Free tool
True Cost of an Employee Calculator
What a worker really costs per productive hour, once super, comp, leave and downtime are counted.
True cost per productive hour
$48.06 /hr
That's 1.6x the $30.00/hr wage you pay them.
$72,322
total cost a year
1,505
productive hours a year
- Wages
- $59,280
- On-costs (super, comp, PPE)
- $13,042
A guide only. Super is 12%; workers comp rates, award loadings and payroll tax vary by state and trade, so treat this as a ballpark and check the relevant award or your accountant. Not financial advice.
Taking on your first employee or apprentice is a big call, and the wage is only part of the cost. Super, workers comp, PPE and training all sit on top, and you pay for leave, public holidays and the hours lost to travel, rain and downtime.
This works out what a worker actually costs you per productive hour, the number your charge-out rate has to cover for them to pay their way.
Frequently asked questions
What does an employee really cost per hour?
A lot more than their wage. On top of the hourly rate you pay super, workers comp, and on-costs like PPE and training, and you pay them for leave and public holidays when they're not on a job. Spread the whole yearly cost over the hours they can actually be billed and the true cost is often 1.5 to 2 times the wage.
What are on-costs?
On-costs are everything beyond the base wage: superannuation (12%), workers compensation insurance, uniforms and PPE, tools, training, and payroll tax if you're over the state threshold. This calculator lets you enter super, workers comp and a catch-all on-costs percentage.
How much does an apprentice cost?
Apprentice wages are lower, but the on-costs, leave and unproductive learning time still apply, so the true cost per productive hour is higher than the wage suggests. Pop the apprentice's hourly wage in and the calculator shows the real hourly cost to you.
Why is the true cost so much higher than the wage?
Because you pay them for hours you can't bill (leave, public holidays, travel, rain days, downtime), and you carry super, comp and on-costs on top. Those unbillable hours and extra costs all have to be recovered across the hours you can bill, which pushes the real hourly cost well above the wage.
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