Employee Cost to Company Calculator (CTC)
For employers: calculate the total cost of an employee, including salary, super, and other on-costs.
Quick Use Samples
Employee Costs
Total Cost Analysis
For an employee with a base salary of $80,000, the total cost to the company (CTC) is $95,439. This includes an additional $15,439 in on-costs such as superannuation, payroll tax, and workers compensation, which represents 19.30% on top of their salary.
CTC Breakdown
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What is Cost to Company (CTC)?
Cost to Company (CTC) is the total cost that an employer incurs for hiring and maintaining an employee. It goes beyond the base salary to include all mandatory on-costs like superannuation, payroll tax, and workers' compensation insurance. It represents the true total cost of an employee from the business's perspective.
Behind the Formula
The calculator sums the employee's base salary with all additional employment-related costs. The formula is: Base Salary + Superannuation (Salary × SG rate) + Payroll Tax ((Salary + Super) × State Rate) + Workers' Compensation ((Salary + Super) × Rate) + Other Costs. The result is the total annual cost of the employee.
Expert Insights
- The 'on-cost' percentage (the total cost above the base salary) is often much higher than employers expect, typically ranging from 15% to 25% depending on the state and industry.
- Payroll tax is a state-based tax and is a significant cost. The rates and thresholds vary by state, with some states having tax-free thresholds that exempt small businesses.
- Don't forget the indirect costs of hiring, which are not included in this calculator. These include the cost of recruitment, training, and providing equipment, which can add thousands to the cost of a new hire.
Actionable Tips
- Use this calculator when budgeting for a new hire to get a realistic picture of the total financial commitment, not just the salary.
- When offering a salary package, you can present the total CTC to a candidate to show them the full value of their employment, including the significant superannuation contribution.
- Review your workers' compensation insurance classification and rate annually. Ensuring you are in the correct category can prevent overpayment.
Real-World Examples
A junior employee in NSW
For an employee on a $60,000 salary in NSW, the total CTC is over $71,000 after adding super, payroll tax, and a typical workers' compensation rate. The on-cost is nearly 19%.
A high-income employee in Victoria
For a senior manager on a $150,000 salary in Victoria, the total cost to the company can exceed $180,000 when all on-costs are included.
A small business below the payroll tax threshold
A small business in a state with a high payroll tax threshold might not have to pay any payroll tax, significantly reducing their on-costs compared to a larger competitor.
Glossary of Terms
On-Costs
The additional, often mandatory, costs that an employer incurs on top of an employee's base salary, such as superannuation and taxes.
Superannuation Guarantee (SG)
The compulsory contribution that employers in Australia must make to their employees' superannuation funds, currently legislated at 11%.
Payroll Tax
A state and territory-based tax that is calculated on the total wages paid by an employer. Rates and thresholds vary by state.