As a general guide, there are a number of key costs of employment for permanently employed staff in Australia.

  • Base Salary is typically quoted excluding other costs such as superannuation (pension) although advertising "salary packages" including Super &tc is not illegal and is prevalent in certain industries.
  • Superannuation or pension of 9.5% of Ordinary Time Earnings (legislated to rise to 12% by 2020) is paid by the employer for all eligible employees.
  • Annual Leave is usually 4 weeks per year and paid at the employee's base pay rate.
  • Public Holidays.  There are usually 10 public holidays in Australia each year.  There are complex rules for waged employees for Penalty pay rates for working on Public Holidays - expect to pay between 1.5 and 2 times normal earnings.
  • Sick leave.  Generally most awards allow for 10 days sick leave per year.
  • Workers Compensation Insurance.  Varies depending on the industry.  The rate is fixed each year by statute and cannot be negotiated.
  • Payroll Tax.  This is a state government tax on annual payroll (including superannuation) over a certain company payroll threshold specified by each State.
  • Recruitment.  The cost of recruiting an employee may range from $5,000 for a base-grade employee upwards.

The exact nature of these costs will depend on the awards, enterprise agreements and other registered agreements and must be fully investigated prior to recruiting staff.

Given the costs of employment, in some circumstances, it may be practical to outsource some business functions.

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