EOR.net.au
Two parts to every quote
An EOR invoice has two parts. The first is the employment cost: everything you would pay if you employed the person yourself. The second is the service fee: what the EOR charges for being the employer. Comparing quotes only works if you separate them.
Employment cost: the on-costs
On top of gross salary, an Australian employer pays:
| On-cost | How it is worked out |
|---|---|
| Superannuation Guarantee | 12% of ordinary time earnings, paid on top of salary. Since 1 July 2026 it must be paid with each pay and reach the fund within 7 business days. |
| Payroll tax | A state or territory tax on wages above a threshold. An EOR's total wages are usually above every threshold, so expect the headline rate in the employee's state. |
| Workers' compensation | Compulsory insurance, priced on wages, industry and claims history. Office roles usually attract low rates. Physical and trade roles cost more. |
| Annual leave loading | Many awards add 17.5% to pay during annual leave. Not every role has it. |
| Leave liability | Annual leave and long service leave build up over time and must be paid when used or when employment ends. |
With super at 12% and payroll tax at around 5% in most states, on-costs for an office role often add 17% or more to salary before leave loading and workers' compensation. Use the employment cost calculator to model a specific salary and state.
Payroll tax by state
| State or territory | Annual threshold | Rate |
|---|---|---|
| New South Wales | $1.2 million | 5.45% |
| Victoria | $1 million | 4.85%, plus surcharges for large employers |
| Queensland | $1.3 million | 4.75% (4.95% for wages over $6.5 million) |
| Western Australia | $1 million | 5.5% |
| South Australia | $1.5 million | 4.95%, phased in between $1.5 million and $1.7 million |
| Tasmania | $1.25 million | 4% up to $2 million, then 6.1% |
| Australian Capital Territory | $1.75 million | 6.75% to 8.75%, depending on total Australian wages |
| Northern Territory | $2.5 million | 5.5% (6.5% for groups with Australian wages of $100 million or more) |
Headline figures only. Many states reduce the threshold gradually for larger employers and offer regional or apprentice concessions. Check the relevant revenue office before relying on these figures.
Service fee models
- Fixed fee per employee per month. The most common model. Easy to budget, and the fee does not rise when you give someone a pay rise.
- Percentage of salary. A margin on top of gross pay. It can look cheap for junior roles and expensive for senior ones.
- Hybrid. A base fee plus charges for extras such as visa support, equipment, benefits administration or terminations.
Costs people forget
- Security deposit. Often one or two months of total cost, held for the life of the arrangement.
- Onboarding or setup fees per employee.
- Currency margins if you are invoiced in another currency, or if the EOR converts your payment.
- Termination costs. Notice, untaken annual leave and any redundancy pay are employment costs you pay, plus any EOR offboarding fee.
- Transfer fees if you later move the employee to your own entity. Some contracts charge this, some do not.
- Award-driven costs such as overtime, penalty rates or allowances, if the role is covered by an award.
How to compare quotes
- Ask each provider for an itemised monthly breakdown at the same salary and location.
- Check the on-costs are the same. If one quote has lower payroll tax or workers' compensation, ask why.
- Compare the service fees separately, over the period you expect to use the EOR.
- Add one-off fees, the deposit and likely termination or transfer costs.
- Read the notice period in the service agreement. A long notice period is a hidden cost if your plans change.
EOR or your own entity: the break-even
Running your own Australian entity has fixed costs: registration, a local registered office, accounting, payroll software, insurance and someone who understands awards and the National Employment Standards. An EOR fee is variable: it grows with every employee. At small headcounts an EOR is usually cheaper. As the team grows, a point comes where your own entity costs less per person. Work out where that point is for your business, and plan the move before you reach it.
Frequently asked questions
Does the EOR fee include superannuation?
Usually not. Super is an employment cost passed through at cost. The fee is what the EOR charges on top.
Is GST charged on EOR invoices?
An Australian EOR will generally charge GST on its supply to an Australian business. Overseas clients should get advice on whether the supply is GST-free for them.
Can I offer extra benefits?
Yes. Health insurance, extra leave, salary packaging or bonuses can usually be arranged. They add to the employment cost and some carry fringe benefits tax.
