Planning and budgeting for an employee is an important step. Having an idea of how much it will cost to employ somebody is a good starting point. 

Work out:

• the rate of pay
• superannuation
• paid leave
• other monetary entitlements
• equipment costs relating to the employment.

You should also factor in costs associated with tax and insurance. Learn more about business tax and business insurance.

Plan for workers alongside your broader business planning. 

Step 1: Work out the rate of pay 

An employee’s rate of pay cannot be less than the legal minimum that applies — even if the employee agrees. Use our step-by-step guide to work out employee minimum pay.

Your checklist: 

• Work out the minimum rate of pay — to avoid advertising a job below the minimum rate or underpaying an employee
• Understand what the market is paying — it might be more than the minimum
• Decide what rate you want to offer — making sure it’s above the legal minimum.

Step 2: Work out the cost of superannuation

Employers must make superannuation contributions for employees. The super guarantee is 12%. 

Learn more paying employee super.

Your checklist: 

• Include superannuation payments in your budget.

Step 3: Work out the cost of paid leave

Full-time and part-time employees are entitled to paid leave including: 

• Annual leave
• Long service leave
• Personal (sick/carers) leave and compassionate leave
• Family and domestic violence leave.

Some awards or workplace agreements also provide for additional paid leave, such as paid parental leave, cultural or ceremonial leave, gender affirmation leave or reproductive leave.

Annual leave and long service leave that the employee is entitled to but has not taken will need to be paid out if their employment ends. 

Be sure to consider these amounts when budgeting for ongoing employment costs.

Casual employees in the national employment system are entitled to paid family and domestic violence leave if they need it. 

Casuals may also accrue long service leave under some state and territory long service laws or industry schemes.

Learn more about paid leave entitlements.

Your checklist: 

• Include paid leave and potential leave payments in your budget.

Step 4: Work out the cost of other monetary entitlements

You may need to pay other monetary entitlements to employees, such as allowances, penalty rates and overtime. 

Learn more about monetary entitlements.

If you want to offer an annual salary, you will need to make sure that the salary will cover any monetary entitlements. 

Your checklist: 

• Include other monetary entitlements in your budget.

Step 5: Work out the cost of equipment

It’s helpful to budget for any equipment the employee will need to do their job. 

For example, IT equipment, uniforms or personal protective equipment (PPE). 

Remember — You must cover the cost of any safety equipment.

Your checklist: 

• Budget for any equipment the employee will need to do their job.