The cost of a Sydney employee 2026-27, worked through for an AUD 110,000 salary
One salaried employee in Sydney, one financial year, and every line an employer pays. The figures follow ATO and Revenue NSW rates for 2026-27, and each assumption is written out.
AUD 110,000 in Sydney, from payroll cost to take-home
On our assumptions, the cost of a Sydney employee 2026-27 on a base salary of AUD 110,000 is AUD 130,284 a year to the employer, before any service fee. Once income tax and the Medicare levy are taken, AUD 84,280 is left for the employee, and AUD 13,200 of superannuation goes to their fund. The gap between the two numbers comes from super, New South Wales payroll tax, workers’ compensation and personal tax.
How much does an AUD 110,000 Sydney hire cost for 2026-27?
A full-time employee in Sydney on an AUD 110,000 base salary costs the employer AUD 130,284 over the 2026-27 financial year (1 July 2026 to 30 June 2027) under the assumptions in the next section. That is AUD 20,284, or about 18.4%, above the salary line, and roughly AUD 10,857 a month. As a planning multiplier, the salary figure times 1.18 gets close to the full statutory cost for a grouped NSW employer.
Three items make up the difference. Superannuation at the 12% guarantee rate adds AUD 13,200. New South Wales payroll tax at 5.45%, charged on salary plus super, adds AUD 6,714.40. Workers’ compensation insurance, at an illustrative rate of 0.30% of salary plus super, adds AUD 369.60.
On the employee’s side, income tax for 2026-27 is AUD 23,520 and the Medicare levy is AUD 2,200, which leaves AUD 84,280 of net pay for the year. Put another way, the employee receives in cash about 65% of what the role costs the employer, with a further AUD 13,200 building up in their super fund.
The figures were produced twice, once with annual bracket arithmetic and once by running twelve monthly pay runs through the ATO withholding formula with super, payroll tax and workers’ compensation calculated per pay. The two methods agree on employer cost to within 4 cents of monthly rounding and on assessed net pay exactly.
What does the Sydney example assume?
The example rests on the following assumptions, and changing any of them changes the result. Each one is a common starting point for a professional hire in Sydney, not a rule.
- Full-time permanent employee working in New South Wales, paid monthly in 12 pay runs
- Australian tax resident for the whole year, claiming the tax-free threshold, with no study or HELP debt
- Holds appropriate private hospital cover, so no Medicare levy surcharge applies
- Base salary AUD 110,000 with superannuation paid on top at 12% of qualifying earnings, well below the AUD 270,830 annual maximum contribution base
- No salary sacrifice, fringe benefits, allowances, overtime or bonus
- No annual leave loading, because the role is award-free or the contract gives none
- Payroll tax in NSW charged at 5.45% on every dollar, on the basis that the employer’s grouped Australian wages are already above the AUD 1,200,000 threshold
- An illustrative workers’ compensation premium of 0.30%, applied to salary plus super, for an office-based professional role
Two of these are assumptions about the employer, not the employee. The payroll tax grouping assumption depends on the employer’s actual payroll, and the workers’ compensation rate is a placeholder because icare’s 2026-27 premium rates were not available when this example was prepared. Both are treated as estimates until the real figures are known.
The example also leaves out the AUD 1,000 instant work-related deduction announced in the 2026-27 Budget, since its enactment had not been confirmed at the time of writing.
How are the AUD 20,284 of employer on-costs built up?
The AUD 20,284 of employer on-costs consists of superannuation, payroll tax and workers’ compensation, each calculated on a different base. Listing them separately makes it easier to see which ones are fixed by federal law and which depend on the state and the employer.
Superannuation, AUD 13,200. Super is guaranteed at 12% of qualifying earnings, both for 2026-27 and for later years. On AUD 110,000 that is AUD 1,100 a month, and since 1 July 2026 each month’s AUD 1,100 has a 7 business day deadline to arrive in the fund. Our guide to the 12% super guarantee covers the rate, the annual cap and what counts as qualifying earnings.
NSW payroll tax, AUD 6,714.40. Revenue NSW sets a 5.45% rate once taxable wages exceed an annual threshold of AUD 1,200,000, and taxable wages include superannuation. The base here is AUD 123,200 (salary plus super). Businesses under common ownership or control are grouped and share a single threshold, which is why the example applies the rate from the first dollar. A standalone employer with a small NSW payroll would pay nothing on this salary, because it would sit far below the threshold.
Workers’ compensation, AUD 369.60. NSW employers insure through icare, where the premium equals wages multiplied by the rate for the employer’s workplace industry classification. The latest confirmed table, for 2024-25, lists 0.213% for computer consultancy services and 0.273% for accounting services, before a small dust diseases levy. The example uses 0.30% of AUD 123,200 as a rounded, cautious placeholder.
Only the first of these three items is the same in every state. A role in Melbourne or Brisbane would carry the same super, but payroll tax and workers’ compensation would follow Victorian or Queensland rules.
Payroll tax also brings a filing rhythm. An employer whose annual NSW liability exceeds AUD 20,000 lodges a monthly return within 7 days of each month’s end and an annual reconciliation by 28 July. For a grouped employer, the monthly figure for this one employee is about AUD 559.53, one twelfth of the annual amount.
How much lands in the employee’s account monthly?
The employee takes home AUD 7,021.67 a month. Monthly gross pay is AUD 9,166.67, and the employer withholds AUD 2,145 under Scale 2 of ATO Schedule 1, using the coefficients the ATO published on 17 June 2026.
The annual tax calculation uses the 2026-27 resident tax rates. Income between AUD 45,001 and AUD 135,000 is taxed at AUD 4,020 plus 30 cents for each dollar over AUD 45,000. For AUD 110,000 that is AUD 4,020 plus 30% of AUD 65,000, or AUD 23,520. The Medicare levy adds 2% of taxable income, AUD 2,200. Assessed net pay is AUD 84,280.
Seen from the employer’s side, each monthly pay run for this employee costs AUD 10,857.00 on average: AUD 9,166.67 of salary, AUD 1,100.00 of super, about AUD 559.53 of payroll tax and AUD 30.80 of workers’ compensation. Of that, AUD 7,021.67 reaches the employee’s bank account, AUD 2,145 goes to the ATO as withheld tax, and the super goes to the fund.
Twelve monthly deductions of AUD 2,145 total AUD 25,740, which is AUD 20 more than the assessed AUD 25,720 of tax and levy. The difference exists because the withholding formula rounds weekly-equivalent earnings and is built to approximate the annual liability. The employee gets the AUD 20 back after lodging a tax return, so cash received during the year is AUD 84,260 and the final position is AUD 84,280.
The AUD 13,200 of super does not appear in take-home pay. It is paid into the employee’s fund, where the fund pays 15% tax on these concessional contributions, and counts toward the AUD 32,500 concessional contributions cap for 2026-27. Our article on Australian payroll STP and PAYG explains how the monthly withholding figure is produced and reported.
Which changes to the assumptions move the result most?
Payroll tax grouping moves the result most: an employer below the NSW threshold would save the full AUD 6,714.40, bringing the annual cost down to AUD 123,569.60. Every other sensitivity in this example is smaller than that one.
Annual leave loading. If an award applies and it grants a 17.5% loading on four weeks’ leave, gross pay rises by AUD 1,480.77 a year. Adding super, payroll tax and the insurance premium on top of that loading lifts employer cost by AUD 1,753.82.
Medicare levy surcharge. The example assumes private hospital cover. Without it, a single person on AUD 110,000 is in the 1% surcharge tier for 2026-27, which runs from AUD 105,001 to AUD 123,000 under the ATO surcharge thresholds. That costs the employee an extra AUD 1,100 a year and does not affect the employer.
Workers’ compensation rate. Each 0.1 percentage point on the premium rate changes the annual cost by AUD 123.20. At the 2024-25 computer consultancy rate the premium would be lower than the placeholder; for a role classified in a higher-risk industry it would be higher.
Tax residency. A foreign resident has no tax-free threshold and pays no Medicare levy, and is taxed under a different scale. The ATO had not yet published 2026-27 foreign resident rates at the time of writing, so that case is not calculated here.
Salary level. The structure of the calculation holds for higher salaries until two limits appear. Income above AUD 135,000 moves into the 37% tax band, and super stops once qualifying earnings for the year reach the AUD 270,830 maximum contribution base. Neither limit affects an AUD 110,000 role.
Where do the EOR fee and leave entitlements fit in the budget?
The service fee and leave entitlements are both outside the AUD 130,284 figure. The fee is a separate line on the invoice, and paid leave is funded from the same salary, so neither is double-counted in the example.
Hiring via Employer of Record Australia means the payroll above is run by us, holding the employment contract as legal employer. On top sits our from USD 560 monthly charge per employee. Converted at 24 September 2026 European Central Bank rates it is near AUD 797 monthly and roughly AUD 9,564 over a year. Adding it gives a yearly budget of about AUD 139,848, subject to exchange movements; a one-off set-up fee, usually charged in the first month, comes on top. Because the fee is set in US dollars, its Australian dollar value on each invoice rises or falls with the exchange rate, while the salary and on-costs stay in Australian dollars. Current terms are on our pricing page.
Annual leave of four weeks and 10 days of personal/carer’s leave are paid at the normal salary when taken, so they are accruals of the AUD 110,000 and add no cash cost. NSW long service leave, 8.67 weeks earned after a decade of continuous service, is also an accrual of salary and is left out for a new hire. Government Parental Leave Pay is funded by the government and is outside the employer’s cost.
For a side-by-side view with a comparable salary on a US payroll, read our comparison of US vs Australia on-costs, which compares US employer payroll taxes with super, payroll tax and workers’ compensation.
Frequently asked
Q01Is superannuation included in the AUD 110,000 salary in this example?
Q02Why is NSW payroll tax charged when the salary is far below AUD 1.2 million?
Q03Which workers’ compensation rate was used for the Sydney role?
Q04Does the monthly take-home of AUD 7,021.67 include any tax refund?
Q05Is the service fee included in the AUD 130,284?
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