The true cost of a new employee in 2025
Bringing on another pair of hands?
It can be a big decision to commit to having a new member on the team, but the right person will bring in the skills you need to grow the business and give you more time to achieve your goals, even if that’s to spend more time with your family.
In 2025, hiring someone new is about more than just paying a wage. With rising superannuation rates, more complex compliance requirements, and tight labour market conditions, it’s important to understand the true cost of employing someone before you make the leap.
Before you advertise the role
Spend some time to understand what skills you need in your business to move forward or to strengthen your position in the market. Think about whether your needs are short-term or long-term. Will this person be taking work off your plate so you can focus elsewhere? Or are they bringing in skills that currently don’t exist in the business?
You may decide that the skill gap could be met by training existing staff who have capacity or would be open to a change in job description. Promoting from within can sometimes be more cost-effective and improve staff retention, especially if your existing team already understands how your business runs.
If you're confident you need to hire externally, that’s when it’s time to define the role more clearly.
If the role is new
Decide whether you need a full-time or part-time employee, and what sort of experience or qualifications the ideal candidate would have. Be realistic about your budget, but also think about what’s non-negotiable for the role.
If they need training when they start, consider who will run this and how that will impact timings. Will a team member need to step back from their usual workload to get the new person up to speed? Will it affect productivity in the short term? These are practical questions to answer before you bring someone on board.
A structured onboarding and training plan will help the new hire settle in quickly, and help you get the most value from them in the long run.
Create a job description
This will help you when it’s time to assess candidates. A good job description should cover the key responsibilities, reporting structure, necessary qualifications, and the type of person who would succeed in the role.
Try to avoid too many acronyms and internal jargon that won’t make sense to people outside your company. You want the right people to understand the opportunity and see themselves in it. Being clear about your expectations also helps reduce the chance of misunderstandings down the track.
Your job description is also a great tool for performance reviews and staff development once the person is in the role.
Understand the true cost
Finally, you’ll want to understand the true cost of adding another staff member. This is often where business owners get caught out. It’s not just about salary.
Start with average industry salary rates, and then work out the fixed and discretionary costs involved. These include:
- Superannuation: As of July 2025, the super rate is 12%. This is on top of base salary.
- Leave entitlements: Annual leave, sick leave, and potentially long service leave depending on the employment arrangement.
- Payroll tax: You may need to register for payroll tax depending on your total wage bill and location.
- Workers compensation insurance: A legal requirement in every state and territory.
- Fringe Benefit Tax (FBT): If you offer benefits like car parking or gym memberships, this could apply.
- Recruitment costs: Include the time spent writing ads, reviewing applications, interviewing, and any fees for recruitment agencies.
- Training and onboarding: Whether internal or external, training takes time and resources.
- Equipment and overheads: Don’t forget software licenses, desks, phones, uniforms, or tools of trade.
All of this contributes to the real cost of hiring. Having a clear picture helps you budget properly and avoid cash flow issues later on.
At First Class Accounts Ovens & Murray, we regularly help clients work through these numbers to see whether a hire is viable. We can also forecast the cash flow impact over the next 6 to 12 months, so you can hire with confidence.
Getting payroll and compliance right
Once you’ve made the decision to hire, getting the back-end admin right is just as important. You’ll need to:
- Set up Single Touch Payroll (STP) correctly
- Make timely super payments
- Record leave accruals accurately
- Report PAYG withholding
- Keep your payroll records compliant
Payroll is one of the most sensitive parts of your business. Getting it wrong damages trust and can lead to fines and penalties. Our payroll service gives you peace of mind. We make sure your team gets paid on time, correctly, and in line with the rules.
Bringing it all together
Employing someone new to help take your business forward is an exciting step. But it’s one that should be taken with all the facts in hand.
If you're about to hire your first team member or growing your existing team, talk to us at First Class Accounts Ovens & Murray.
We’ll help make sure your finances, systems, and paperwork are in order before you hire, and that you understand the true cost of bringing someone new into the business.