When you think about the true cost of staff, it’s tempting to stop at their salary or their hourly rate. However, that number only scratches the surface.
The real cost of a staff member goes far beyond what’s on their payslip, and it’s something many business owners don’t fully consider until cash flow gets tight. Understanding the true cost of staff is crucial for effectively managing your budget.
The Hidden Costs in Small Business
These can include:
- Leave entitlements – annual leave, sick leave, carers leave, public holidays.
- Superannuation – 12% from 1 July 2025, added on top of wages (ATO: Super guarantee percentage).
- Training & onboarding – time and money spent bringing new hires up to speed.
- Productivity dips – not every paid hour is billable. Meetings, admin, and downtime all add up.
- Staff turnover – recruitment, rehiring, and retraining can be costly.
- Workplace obligations – insurance, workers comp, payroll tax (depending on your state), plus compliance costs (Fair Work: Leave entitlements).
To summarise, that $60,000 salary can look closer to $75,000–$80,000 once everything is factored in.
Why Understanding the True Cost Matters
Knowing the real cost of your staff helps you:
- Price your services profitably.
- Manage cash flow with confidence.
- Avoid nasty surprises at BAS or tax time.
- Finally, you can then decide whether to hire, outsource, or invest in automation.
Sadly, many small businesses in Australia make the discovery too late. What looked affordable on paper, suddenly becomes a real pressure point on their bank account.
The Profit First Perspective
At Amarose Accounting, we approach staffing decisions through a Profit First lens. That means asking:
- How much profit is left after paying staff?
- Are wages aligned with your income, or are they eating too much of the pie?
- Is your team structured in a way that supports your long-term goals?
It’s about turning numbers into clarity—and clarity into confidence.
The Bottom Line
The “headline” wage is only part of the story. Once you uncover the hidden costs, you’ll be better placed to make smart decisions about hiring, pricing, and growth.
Ultimately, if you’d like to explore how we work and see if we’re the right fit, book a free discovery call. We are one of fewer than 15 Certified Profit First Professionals in Australia, so if you decide to work with us, we’ll help you understand the true cost of staff in your business, see your numbers clearly, and put your profit first.
Note – This article provides general information only and does not take into account your personal or business circumstances. Always seek professional advice tailored to your situation.
