So what does it really cost to employ someone in your business? Here at Infuse this is a question we regularly get asked. In this article we break it down for you so you understand the costs and can make informed decisions for your business.

The cost of employing someone in Australia includes both direct and indirect costs. The direct costs are those that are associated with the employee’s wages or salary, while the indirect costs are associated with other expenses related to their employment.

Direct Costs:

  1. Wages and Salaries: This is the most significant direct cost associated with employing someone in Australia. It includes the base salary, allowances, overtime payments, and bonuses.
  2. Superannuation: Employers in Australia are required to pay a percentage of their employees’ earnings into a superannuation fund. The current minimum rate is 10.5%.
  3. Payroll Tax: Employers may be required to pay payroll tax to the state or territory government. The tax rate varies between states and territories. (In Victoria payroll tax only applies to payrolls greater than $700K)
  4. Workers’ Compensation Insurance: Employers must provide workers’ compensation insurance to protect their employees in case of a workplace injury.

Indirect Costs:

  1. Leave Entitlements: Employers must provide their employees with paid leave, including annual leave, sick leave, and long service leave.
  2. Training and Development: Employers may need to invest in their employees’ training and development to improve their skills and productivity.
  3. Equipment and Supplies: Employers must provide their employees with the necessary equipment and supplies to perform their job.
  4. Indirect Taxes: Employers may also need to pay other indirect taxes such as GST on goods and services purchased for business purposes.

The total cost of employing someone in Australia can vary depending on the industry, the type of employment, and the location of the business. Employers should be aware of all the costs associated with employing someone and factor them into their budgeting and financial planning.

If you need some guidance on what the true employment costs for your business are, please book in a meeting with us.