True cost of an employee
What an hour of a permanent, casual or subcontract worker really costs once leave, super and non-billable time are counted. Free, no sign-up.
Example Change any number and press Work it out.
$46.33 per hour worked. That's 1.57× the $35.00 hourly rate once leave, super and non-billable time are counted.
| Wages a year | $69,160 |
| Super | $8,299 |
| Total cost a year | $77,459 |
| Hours paid | 1,976 |
| Hours actually worked | 1,672 |
| Hours you can bill | 1,408 |
A guide, not payroll advice. Check what applies to your workers.
Why the hourly rate isn't the cost
A permanent worker is paid for 52 weeks but works fewer, because of annual leave, sick days and public holidays. Super goes on top. Then part of every working week goes on travel, the yard, admin and quoting that nobody pays you for.
Spread the full yearly cost over the hours you can actually bill and the real cost is often half as much again as the hourly rate. That's the number to quote from. Casual and subcontract workers have no paid leave, so their cost is closer to the rate, but non-billable time still counts.
Questions
Do I need to include leave loading?
Only if an award or agreement says you pay it. Many trade awards pay 17.5% on annual leave. It's off by default.
When does payroll tax apply?
Only once your total wages are over your state's threshold. Most small trade businesses are under it, so it's off by default.
Do contractors get super?
Sometimes. If a contractor is paid mainly for their labour, super can still apply. Check with the ATO or your accountant.
Every job, worked out for you
Tradies Sidekick reads your Xero and ServiceM8 and works this out every night from your own numbers: for every customer, every member of the team, and the business as a whole.
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