Before You Hire: What Your First Employee Really Costs
You've found the right person. The wage feels doable. You make the offer.
Then the first pay run hits, and the number is bigger than you budgeted for. Superannuation, payroll tax, workers comp, leave accruing from day one. None of it was hidden, exactly. It just wasn't on the job ad.
This catches out more first time employers than you'd think, and it's entirely avoidable.
The wage is the easy part
A wage is one number. Employing someone is several.
Right now, employers pay superannuation at 12% of ordinary earnings, on top of the wage, not out of it. Depending on your total wage bill, you may also cross your state's payroll tax threshold, which most business owners don't check until it's too late. Workers compensation insurance is compulsory in most cases and priced on your industry and wage bill. Leave entitlements start accruing from the employee's first day, whether you've thought about them or not.
Add it up and the true cost of a new hire usually sits well above the advertised wage, sometimes by a significant margin.
Where it gets more complicated
From 1 July 2026, Payday Super means employers have to pay super at the same time as wages, not quarterly as it’s been. That changes how you need to manage cash flow around every pay run, not just at tax time.
Your payroll system also needs to be reporting correctly through Single Touch Payroll and withholding PAYG properly from the start. Get it wrong early and you're fixing it retrospectively, which is harder and way more expensive than getting it right the first time.
Get the real number before you make the offer
None of this means you shouldn't hire. It means you should know what you're committing to before you do.
At Citrine Advisory, we work through the full cost of a hire with you before you post the job ad, not after. Superannuation, payroll tax, workers comp, leave, cash flow impact, all of it, so the offer you make is one your business can actually sustain.
If you're weighing up your first hire, talk to us first. We'll give you the real number, not just the wage.