Published: April 2026
There are two productivity drains operating simultaneously in almost every Australian workplace, and most businesses are only tracking one of them.
Absenteeism, the cost of employees not being at work when they should be, costs Australian businesses approximately $33 billion per year in lost productivity. Presenteeism, the cost of employees being physically present but mentally absent or working well below capacity, costs another $35 billion. Together they represent a combined $68 billion annual drag on the Australian economy that quietly consumes margins and limits growth across every industry.
For context, that combined figure is larger than Australia's entire annual staff turnover bill. Most business owners spend significant energy on recruitment and retention while these two issues silently cost more.
This page compiles the most current Australian data on absenteeism and presenteeism rates, industry patterns, causes, and what employers can realistically do about both.
The $33 billion headline
The $33 billion annual cost of absenteeism to the Australian economy comes from Direct Health Solutions' Absence Management Survey, the most comprehensive ongoing Australian dataset on workplace absence. The figure reflects lost productivity across the workforce, not just direct wage costs.
Cost per employee
The direct cost of absenteeism averages $4,025 per employee per year, up from $3,395 in the pre-pandemic period, according to the DHS 2023 Absence Management and Wellbeing Report. When indirect costs are included, covering overtime for covering staff, productivity loss for managers filling gaps, and temporary replacement, the total rises to represent 7-8% of total payroll.
For a 20-person business with an average salary of $70,000, that is a total payroll of $1.4 million. Seven percent of that is $98,000 per year in absenteeism-related costs. Most owners of 20-person businesses have never looked at it through that lens.
Days lost per employee
Employees are taking an average of 9-14 days of unplanned absence per year depending on industry and methodology. The DHS 2023 report found overall absenteeism increased by 2.5 days per employee, a 23% rise, between 2019 and 2022. This increase has not fully reversed. A striking finding from the same dataset: a worker entitled to 10 days of sick leave will take approximately 11 days per year. The entitlement shapes the expectation.
Key absenteeism benchmarks:
The underreporting figure is significant. It means the numbers above likely understate true absenteeism levels. When absence goes untracked or unaddressed, it compounds silently.
Presenteeism costs Australian businesses approximately $35 billion per year, making it the larger of the two problems despite being far less visible and almost never tracked by SMEs.
Presenteeism is not about employees who seem disengaged in a general sense. It is specifically the productivity loss that occurs when employees are present but working at significantly reduced capacity due to physical illness, mental health issues, stress, or exhaustion. A person coming to work with influenza, a migraine, or significant anxiety is physically present but producing a fraction of normal output, often while also creating errors or requiring colleagues to check their work.
Research suggests the productivity cost of a worker coming to work unwell can reach 1.7 times their wage in lost output when the full downstream effect is accounted for, including errors made and time others spend correcting them.
Why presenteeism is growing
Several factors are driving presenteeism higher in Australian workplaces. Job security anxiety, reflected in the 68% of employees who report concern about potential redundancy, makes employees reluctant to take sick days even when genuinely unwell. Workload intensity means absent employees often face a significant backlog on return, creating a disincentive to stay home. The ELMO Q3 2025 data found:
Burnout is the primary driver of presenteeism in the short term and absenteeism and resignation in the medium term. These three figures moving simultaneously signal a workforce under sustained pressure.
Mental health is now the dominant driver of workplace productivity loss in Australia, ahead of physical illness for cost impact.
Safe Work Australia estimates the total cost of poor workplace psychosocial safety climate at approximately $6 billion per year, encompassing losses from both absence and presenteeism. The total cost of depression alone to Australian employers through presenteeism and absenteeism is estimated at $6.3 billion per year.
PwC's research on mentally healthy workplaces found that interventions addressing psychosocial risk factors generate a return of $2.30 for every $1 invested when they successfully reduce absence and presenteeism. The challenge is that most Australian SMEs have not mapped their psychosocial risk factors and have no systematic approach to addressing them.
Key mental health drivers of absenteeism and presenteeism in Australian workplaces include workload that exceeds capacity, lack of control over how work is performed, poor quality management, unclear role expectations, and unresolved workplace conflict. More than half of employers reported increased absences linked to mental health concerns during 2025, according to DHS research.
Absenteeism is not evenly distributed. Some sectors carry significantly higher burden than others.
Travel, tourism and hospitality consistently records the highest absenteeism, with workers taking an average of 11.9 days of unplanned absence per year according to DHS data. This reflects the combined effect of physical demands, irregular hours, lower wages, limited career development, and high burnout rates.
Transport and logistics is the second highest, reflecting shift work, physical demands, and the psychological pressure of time-critical work where errors have real consequences.
Contact centres record persistently high absenteeism regardless of which industry they operate within, driven by the emotional labour of high-volume customer interactions and the stress of constant performance monitoring.
Healthcare and social assistance, despite being a high-purpose sector, records elevated absenteeism driven by physical and emotional demands, chronic staff shortages requiring overtime, and high rates of workplace injury and mental health impact.
Office-based professional services tend to record lower absenteeism but higher presenteeism, reflecting a workplace culture where being seen at a desk carries social weight even when unwell, and where reduced output in knowledge work roles is harder to detect and quantify.
The DHS research across more than 130 Australian companies employing over 500,000 employees identified three consistently effective management practices. These are not wellness programs or employee benefits. They are process-based management disciplines:
Companies in the DHS dataset that implemented all three saw absence rates decline meaningfully without expensive interventions. Return-to-work interviews in particular are consistently identified as the single highest-impact practice. A brief, non-punitive conversation on return from every unplanned absence signals that absence is noticed, enables early identification of underlying issues, and significantly reduces the normalisation of casual absenteeism.
Wellness interventions can reduce absenteeism by 30-40% when well-designed and targeted, according to a review of 55 case studies referenced in the DHS and PwC research. The key caveat is well-designed. Generic wellbeing programs not connected to the actual drivers of absence in a given workplace have low uptake and limited impact.
Reducing absenteeism and presenteeism does not require large program investment. The highest-impact actions are mostly operational:
How much does absenteeism cost Australian businesses?
Approximately $33 billion per year in lost productivity, according to Direct Health Solutions research. When indirect costs are included, absenteeism represents 7-8% of total payroll for most businesses.
What is presenteeism and how much does it cost?
Presenteeism is the productivity loss from employees who are present but working at reduced capacity due to illness, stress, or burnout. It costs Australian businesses approximately $35 billion per year, making it the larger cost of the two.
How many sick days do Australian employees take on average?
Between 9 and 14 days of unplanned absence per year depending on industry. DHS research found that a worker entitled to 10 days of sick leave will take approximately 11 days annually.
What percentage of sick days are taken by people who are not actually sick?
ELMO's Q3 2025 sentiment survey found 52% of Australian workers admitted to taking at least one sick day when not physically unwell. DHS research found 55% of organisations believe absence is underreported.
Which industries have the highest absenteeism?
Travel, tourism and hospitality (11.9 days average per employee), transport and logistics, contact centres, and healthcare consistently record the highest rates. Office-based professional services tends toward lower absenteeism but higher presenteeism.
What is the most effective way to reduce absenteeism?
DHS research across more than 130 Australian companies identifies three consistently effective practices: escalation to senior management when patterns emerge, return-to-work interviews after every absence episode, and formal trigger review points for repeated short-term absences.
What drives presenteeism in Australian workplaces?
The primary drivers are mental health concerns including stress, burnout, and anxiety, combined with job security anxiety that makes employees reluctant to take sick days. Forty percent of employees reported feeling burnt out in Q3 2025.
How much does the mental health component cost specifically?
Safe Work Australia estimates the cost of poor psychosocial safety climate at approximately $6 billion per year. The cost of depression alone through presenteeism and absenteeism is estimated at $6.3 billion annually.
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Employment Hero Gold Partner, CA-qualified, and Xero Certified, we replace fragmented finance and HR processes with one responsive, senior-level function at a fraction of the cost of full-time hires. We serve growing businesses across Sydney, Melbourne, Brisbane, and Perth, with packages starting from $1,500 per month and no lock-in contracts.
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