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Step 1 of 6 — Worker type
Are you calculating costs for an employee or a subcontractor?
Subcontractor compliance flags
Answer honestly — getting these wrong can trigger ATO audits and back-payment obligations.
Works more than 90 days per financial year with your business?
⚠ Payroll tax deeming may apply
Earns 80%+ of their income from your business for 52 consecutive weeks?
⚠ Superannuation guarantee may apply
If this contractor earns 80%+ of their income from you for 52+ consecutive weeks, you may be required to pay superannuation at 11.5% on their payments — regardless of their ABN or business structure.
ℹ Why 48 weeks?
This tool uses 48 working weeks (52 minus 4 weeks annual leave). Dividing salary by 52 weeks significantly underestimates real cost — it ignores leave loading and the overhead of unproductive weeks.
ℹ Full-time equivalent
~1,750 hours = full time equivalent. Adjust down if this contractor works part-year or part-week.
| Cost item | Annual $ | % of salary |
|---|---|---|
| Base salary | — | 100% |
| Superannuation (11.5%) | — | 11.5% |
| Payroll tax | — | — |
| Annual leave provision (4 wks) | — | 7.7% |
| Long service leave (2.7%) | — | 2.7% |
| Productivity allowance (2%) | — | 2.0% |
| Total true cost | — | — |
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Subcontractor obligations
Contract payments always apply. Super and payroll tax obligations depend on the compliance flags from Step 1.
| Obligation | Applies? | Notes |
|---|---|---|
| Contract payments | ✅ Always | Agreed rate × hours |
| Superannuation (11.5%) | — | Triggered if 80%+ income rule applies |
| Payroll tax | — | Triggered if 90-day rule applies |
State payroll tax rates (FY2025)
| State | Rate | Annual threshold |
|---|---|---|
| QLD | 4.75% | $1,300,000 |
| NSW | 5.30% | $1,200,000 |
| VIC | 4.85% | $700,000 |
| SA | 5.00% | $1,500,000 |
| WA | 5.50% | $1,000,000 |
| TAS | 6.50% | $1,250,000 |
| ACT | 6.85% | $2,000,000 |
| NT | 5.50% | $1,500,000 |
Toggle on any that apply. Defaults are industry averages — adjust to your actual costs.
🚗 FBT exemption update
Electric and eligible PHEV vehicles have been FBT-exempt since 1 April 2022. Talk to your accountant about whether your fleet qualifies — this can significantly reduce your effective fleet cost.
Below-the-line costs (annual $)
Billable workforce
Target margin
30% is typical for trades — covers SGA + net profit
💡 Don't forget depreciation on tools, vehicles and equipment — and a salary for yourself if you do any admin work.
Annual salary / contract cost
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True annual cost
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True labour cost per hour
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Overhead recovered per hour
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Annual cost breakdown
Charge-out rate build-up
| Labour cost per hour | — |
| + Overhead per hour | — |
| = Total cost per hour | — |
| ÷ (1 − 30%) | — |
| = Minimum charge-out rate | — |
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Full cost breakdown — labour, on-costs, allowances, overhead and minimum charge-out rate.
See how your numbers score across pricing, compliance, margin and overhead allocation.
Book a free 30-minute strategy call with a TradeWise advisor. We'll show you exactly where your charge-out rates need to be.
Book a strategy call →© TradeWise Group · tradewisegroup.au · This tool is for indicative purposes only. Speak to your advisor before making pricing decisions.
