Real Cost of an Internal Employee in Australia - Calculator
Real Employee Cost & Outsourcing Comparison Calculator
When adding a new employee, it is important to consider more than just wages and superannuation. There are additional hidden costs such as insurance, training, equipment, and software, as well as paid leave entitlements and unproductive time like public holidays, sick leave, and internal meetings.
This calculator helps you:
- Understand the true cost of employing someone internally, including all typical overheads.
- Compare that cost to the likely rate you would pay to engage an outsourced partner or contractor.
In some situations, especially short-term ones, it may make better business sense to outsource, such as when:
- Covering maternity leave or supporting a job-share arrangement
- Avoiding recruitment costs (often 15% to 25% of the first year’s salary)
- Reducing onboarding time and administrative effort
Use this tool to make informed decisions about internal hiring versus external support based on clear, calculated figures.
💸 Salary & Cost Inputs
This section lets you input the base salary and typical employment costs, such as super and equipment. These influence your total wage costs - even before taking account of annual leave and public holidays.
| Item | Input | Calculated Amount |
|---|---|---|
| Annual Salary ($) | $80,000 | |
| Superannuation (%) | $9,600 | |
| Other Costs (%) Includes insurance, training, software, equipment. 10% is a reasonable starting point. |
$8,000 |
🗓 Leave & Time Assumptions
To calculate wages accurately, we first need to estimate how many weeks an employee is productively working, after accounting for paid leave, sick days, and public holidays.
| Item | Value |
|---|---|
| Annual Leave (weeks) | |
| Sick Leave (weeks) | |
| Public Holidays (days) Public holidays vary by Australian state. 13 is typical for Victoria. |
📈 Outsourced Inputs
You may choose to outsource the work to a partner or contractor. In this case, they will need to take into account of some additional costs - even productive employees have unbillable time. This section lets you estimate how much non-billable time and profit margin a outsourced partner may have.
| Item | Input | Calculated Amount |
|---|---|---|
| Unbillable Time (%) Covers internal meetings, admin, self-education. 15% is a common assumption. |
$0.00 | |
| Company Margin (%) Includes business development, overheads, and target profit. 20% is typical. |
$0.00 |