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Employee cost calculator

A $42-an-hour tradie doesn’t cost $42 an hour. Add super, leave, public holidays, workers comp and downtime, and the real number is what your charge-out rate has to beat.

Employee details

Pay, on-costs and how many hours actually end up on jobs.

Hourly pay rate

The gross hourly rate you pay them — check the relevant modern award for the minimum.Paid hours per week

hrs

Standard full-time is 38. Use their ordinary paid hours, not overtime.Superannuation guarantee

The SG rate is 12% from 1 July 2025.Workers compensation premium

Varies by state and industry — trades typically run 1.5%–5% of wages. Check your policy.Payroll tax

Only applies once your total wages bill passes your state’s threshold (roughly $0.9m–$2m). Leave at 0 if you’re under it.Annual leave

wks

4 weeks is the standard full-time entitlement.Public holidays

days

Paid public holidays per year — 10–13 days depending on state.Personal / sick leave

days

The full-time entitlement is 10 days per year. Use what they typically take if you prefer.Other annual costs

PPE, tools, training, phone, uniforms, licences, vehicle share — anything you spend to keep them on the road.Productive (billable) hours per week

hrs

Hours actually charged to jobs — travel, yard time, toolbox talks and pickups aren’t billable. For field staff this is often 28–32 of a 38-hour week.

True cost per productive hour

$73.88/hr

They’re paid $42.00/hr, but once super, leave, workers comp and downtime are counted, every hour they bill costs the business $73.88.

Base annual wages$82,992

Superannuation$9,959

Workers comp + payroll tax$2,075

Other costs$2,500

Total annual cost$97,526

On-costs above base wages17.5%

Productive hours per year1,320

Cost multiplier vs pay rate1.76×

Put this true cost rate against each worker in traqR and every job shows real labour cost and margin — not just the wage you paid.

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How it works

Start with the wage bill

Their hourly rate times paid hours, all 52 weeks — you pay for annual leave, public holidays and sick days even though no work gets done on them.

Add the on-costs

Super, workers comp, payroll tax, PPE, training and vehicle costs typically add 20–40% on top of the base wage before they lift a tool.

Divide by productive hours

Only the hours charged to jobs earn anything back. Spreading the full cost across those hours gives the number your charge-out rate has to beat.

Frequently asked questions

Why is the true cost so much higher than the pay rate?

Two compounding effects. First, on-costs: super (12%), workers comp, payroll tax and gear add 20–40% to the wage bill. Second, downtime: you pay for 52 weeks but get roughly 45–46 weeks of work, and even then only 28–32 hours a week land on jobs. A $42/hr employee routinely costs $65–$75 per productive hour.

What’s the current superannuation guarantee rate?

The super guarantee reached its legislated maximum of 12% on 1 July 2025. It’s payable on ordinary time earnings on top of the wage, generally not on overtime.

Do I need to worry about payroll tax?

Only once your total Australian wages bill (including super) passes your state’s threshold — roughly $900k in Victoria, $1.2m in NSW, $1.3m in Queensland, higher in some other states, and rates around 4–6% above it. Most small trades businesses are under the threshold; leave the field at 0 if that’s you.

How does this relate to my charge-out rate?

The true hourly cost is the floor. Your charge-out rate has to cover this cost plus a share of business overheads plus your margin. Feed this number into our charge-out rate calculator to price labour properly.

This calculator is a general guide, not financial, tax or legal advice. Award rates, leave loading, allowances, workers comp premiums and payroll tax thresholds vary by state, industry and employee. Check your obligations with your accountant, your workers comp insurer and the relevant Fair Work modern award.

Cost every job with real labour rates

Store each worker’s true cost rate in traqR and every job and quote shows genuine labour cost and margin. Try it free for 14 days.

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