Article
4 min read
Employer Costs for an Employee in Australia (2026 Guide)
Employer of record
Global hiring
Author
Jemima Owen-Jones
Last Update
February 05, 2026
Quick answer: What is the total employer cost for a $100,000 salary in Australia?
For an employee earning $100,000 USD annually in Australia, employers can expect mandatory employer costs of approximately $17,800 USD per year, bringing total compensation costs to $117,800 USD.
Estimated total employer cost (Australia): ~17.8% on top of gross salary (example estimate).
Hiring in Australia can be a great way to access top talent—whether you’re expanding into the market, building a remote team, or hiring your ideal candidate locally.
But even when two employees earn the same salary, the total employer cost varies by country due to statutory contributions, payroll taxes, and mandatory insurance requirements.
This guide provides a ballpark estimate of the mandatory employer cost of hiring an employee in Australia, using an example salary of $100,000 USD per year.
What’s included in this estimate?
This estimate includes mandatory employer-side statutory costs that may apply when hiring an employee in Australia, such as:
- Workers’ compensation insurance (Workers Cover)
- Payroll tax (state/territory dependent)
- Superannuation employer contribution (retirement fund)
What’s not included in this estimate?
This estimate generally does not include additional costs such as:
- Paid annual leave (vacation)
- Sick pay
- Private health insurance
- Employer-provided benefits or allowances
- Bonuses, equity, or commissions
- Equipment and onboarding expenses
- Costs that vary by industry, award coverage, or location beyond payroll tax
Why employer costs vary in Australia (and globally)
Employer costs can differ depending on:
- State and territory payroll tax rates and thresholds
- Superannuation contribution rules
- Industry-specific insurance rates
- Employee classification and contract type
- Changes in regulation year to year
- Currency exchange rate fluctuations (if you pay in a different base currency)
Estimated employer cost breakdown for Australia
Below is an estimated breakdown of mandatory employer costs for hiring an employee in Australia earning $100,000 USD/year.
Example salary used in this estimate
- Annual gross salary: $100,000 USD
- Annual gross salary (approx.): $160,849 AUD
Employer mandatory costs (estimated)
| Employer Cost Category | Estimated Annual Cost (AUD) | Estimated Annual Cost (USD) | Notes |
|---|---|---|---|
| Workers Cover | $359 | $223 | Mandatory insurance for sickness/injury |
| Payroll Tax | $9,774 | $6,077 | Estimated state and territory payroll tax |
| Superannuation | $18,498 | $11,500 | Employer contribution into retirement fund |
| Total Estimated Employer Costs | $28,631 | $17,800 | Total mandatory employer cost estimate |
Total compensation cost (salary + mandatory employer costs)
| Total | AUD | USD |
|---|---|---|
| Gross Salary | $160,849 | $100,000 |
| Mandatory Employer Costs | $28,631 | $17,800 |
| Total Compensation Cost | $189,480 | $117,800 |
Global Hiring Toolkit
Hire in Australia (and 130+ other countries) with Deel
Hiring internationally introduces a new layer of complexity—local labor laws, payroll rules, statutory benefits, and compliance requirements can add up fast.
Deel helps you hire employees in Australia and across 130+ countries while handling:
- Local payroll and tax compliance
- Statutory contributions and reporting
- Country-specific benefits administration
- Contracts and onboarding support
- Ongoing compliance as regulations change
With Deel, you can scale your global hiring strategy faster—without building local entities or juggling multiple vendors. Book a demo to learn more.
FAQs
What are ordinary time earnings in Australia?
Ordinary time earnings are the employee’s regular earnings for their standard hours of work (excluding some overtime payments). Ordinary time earnings are important because the superannuation guarantee is generally calculated based on ordinary time earnings.
How do employer costs differ for full time employees in Australia?
For full time employees, employer costs in Australia typically include salary plus mandatory superannuation contributions and any payroll tax or workers’ compensation obligations. Total cost can increase depending on benefits, leave, and award requirements.
What are the main employer costs for employment in Australia?
The biggest employer costs for employment in Australia often include:
- Base salary (part of total wages)
- Superannuation guarantee contributions
- Payroll tax (depending on state and wage thresholds)
- Workers’ compensation insurance
- Additional costs can apply depending on contract terms and role requirements.
What is the superannuation guarantee in Australia?
The superannuation guarantee is a mandatory employer contribution into an employee’s retirement fund. Employers must pay superannuation on eligible earnings, which increases total hiring costs beyond salary.
Do employers pay income tax for employees in Australia?
No. Income tax is paid by the employee, but employers are responsible for withholding the correct amount from wages and remitting it to the Australian Taxation Office (ATO) through payroll.
What is the minimum wage in Australia?
Australia has a statutory minimum wage, which employers must meet as a legal baseline. Minimum wage changes can affect hiring budgets, especially for entry-level roles, and may also influence payroll tax exposure depending on total wages.
What should an employment contract include in Australia?
A compliant employment contract in Australia typically includes salary, working hours, job duties, leave entitlements, termination terms, and any applicable award or enterprise agreement conditions. Clear contracts reduce risk and support payroll compliance.
What are penalty rates and do they affect employer costs?
Penalty rates are higher pay rates that may apply for work performed outside standard hours, such as nights, weekends, or public holidays. Penalty rates can increase total wages and therefore increase total employer costs.
Do employees get paid public holidays in Australia?
Yes. Eligible employees are generally entitled to paid public holidays, depending on their contract and working pattern. Public holidays can increase the real cost of employment because employees may be paid while not working or paid at penalty rates if they work.
How much paid annual leave per year do employees receive in Australia?
Under the National Employment Standards (NES), full-time employees are generally entitled to paid annual leave per year (typically 4 weeks). Employers should plan for paid leave as part of total compensation and workforce planning.
What are the National Employment Standards (NES)?
The National Employment Standards (NES) are minimum employment entitlements in Australia covering areas like working hours, leave, public holidays, and termination rules. NES compliance is a core part of legal hiring and affects total employment costs beyond salary.
Jemima is a nomadic writer, journalist, and digital marketer with a decade of experience crafting compelling B2B content for a global audience. She is a strong advocate for equal opportunities and is dedicated to shaping the future of work. At Deel, she specializes in thought-leadership content covering global mobility, cross-border compliance, and workplace culture topics.
