If you are a growing Australian business exploring HR options, cost is usually one of the first questions. Hiring a full-time people and culture manager is expensive, and for many SMEs it is simply not the right move yet. Outsourcing HR, or engaging a fractional HR provider, is increasingly popular because it delivers genuine capability at a fraction of the internal hire cost.
But what does outsourced HR actually cost in Australia? The answer depends on the model, the scope, and the provider. This article breaks it all down.
Not all outsourced HR is the same, and the cost varies significantly depending on what you are actually buying.
An HR consultant charges by the hour or by the project. Hourly rates for experienced HR consultants in Australia typically range from $150 to $350 per hour. Project-based engagements for specific work, such as a policy overhaul or an organisational restructure, might cost $5,000 to $20,000 depending on scope and complexity. The limitation of this model is that it is not ongoing and not embedded. You get advice and deliverables, not an operational people function.
An HR platform such as Employment Hero or BambooHR charges a monthly subscription per employee. Employment Hero, for example, is typically priced between $8 and $15 per employee per month for a business in the SME range. For a 30-person business, that is $240 to $450 per month. The platform handles the administrative and compliance layer but does not replace human HR support.
A fractional HR provider charges a monthly retainer that covers both the platform management and the human delivery. This is the model that most directly replaces what an internal hire would do, because it includes operational delivery, strategic oversight, and daily availability.
Fractional HR retainers in Australia typically range from $2,500 to $6,000 per month, depending on the scope of services and the size of the business.
At the lower end of the range, around $2,500 to $3,000 per month, you would typically get light operational support: Employment Hero administration, basic leave management, and limited recruitment coordination. This suits a business with a stable headcount and low HR complexity.
At the mid-range of $3,500 to $4,500 per month, you get a more comprehensive service covering the full operational HR function: recruitment coordination, onboarding and offboarding, leave management, Employment Hero administration, pulse surveys, and culture initiatives, along with access to a senior HR professional for complex matters and strategic oversight.
At the higher end of $5,000 to $6,000 per month, you would typically see a broader scope with higher hiring volumes, more frequent strategic advisory, or additional services such as performance framework development or expanded engagement programs.
Scale Suite's standard HR retainer is $3,750 per month, which covers the full scope of operational and culture HR delivery for a business in the 10 to 60 employee range.
A well-scoped fractional HR retainer should cover recruitment coordination including recruiter liaison, direct sourcing support, interview coordination, reference checks, and offer letter preparation. It should include onboarding and offboarding management, Employment Hero administration, leave management, employee records and policy maintenance, quarterly pulse surveys and engagement initiatives, and access to an HR professional via Slack and Zoom for day-to-day queries and approvals.
It should also include periodic strategic reviews with the business owner or CEO to assess priorities, review engagement data, and plan for the quarter ahead.
What a retainer typically does not include are Fair Work legal matters, formal workplace investigations, workers compensation claims management, and payroll processing, which is usually priced separately or covered under a finance service arrangement.
Most fractional HR providers work on a fixed retainer, which means you should not face significant variable costs on top of the monthly fee. However, there are a few things to clarify before signing an engagement.
Out-of-scope work should be flagged and agreed in writing before it commences, with a clear fee if applicable. Any expanded scope, such as a major policy overhaul, a restructure process, or a significant uplift in hiring volume, should be discussed and repriced if it materially changes the workload.
Some providers charge separately for Employment Hero licensing. Scale Suite is an Employment Hero Gold Partner, and we work with your existing Employment Hero account or can assist with setup as part of the engagement.
A full-time people and culture manager at $100,000 base salary costs approximately $150,000 to $160,000 in the first year all-in, and $120,000 to $130,000 per year from year two, when you account for superannuation, leave entitlements, and recruitment fees. That is a fixed cost you carry regardless of workload.
A fractional HR arrangement at $3,750 per month costs $45,000 per year. For a business with 10 to 60 employees, this typically delivers equivalent or better HR capability at roughly 30% to 35% of the cost of an internal hire, with no recruitment risk, no leave liability, and no super obligation.
The saving in the first year alone is approximately $105,000 to $115,000.
Professional HR support when you need it - without hiring a full-time HR manager. Our experienced team handles recruitment, policy creation, and people systems on-demand. Whether you need end-to-end hiring support, performance frameworks, or HR policy development, we deliver efficient solutions.
There are no hidden fees, no variable hourly charges for work within scope, and no lock-in after the initial term.
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How much does outsourced HR cost in Australia?
Fractional HR retainers in Australia typically range from $2,500 to $6,000 per month, depending on scope and business size. This compares to $120,000 to $150,000 per year for a full-time people and culture manager.
What is included in a fractional HR retainer?
A typical retainer covers recruitment coordination, onboarding and offboarding, Employment Hero administration, leave management, people policies, pulse surveys, culture initiatives, and ongoing HR advisory via Slack and Zoom. Legal matters and payroll are usually priced separately.
Is there a minimum term for outsourced HR?
Most fractional HR providers require a minimum term of three months to allow for setup and embedded delivery. After the initial term, engagements typically roll on a monthly basis.
Are there extra costs on top of the monthly retainer?
In a well-structured fixed retainer, most work within the agreed scope should be covered. Out-of-scope work should be flagged and agreed in writing before it commences. Ask your provider upfront about how out-of-scope requests are handled.
Does outsourced HR include Employment Hero?
This depends on the provider. Scale Suite is an Employment Hero Gold Partner and works with your existing Employment Hero account or can assist with setup as part of the engagement.
Is GST charged on outsourced HR services?
Yes. HR services provided by Australian businesses are subject to GST. Fees quoted by Scale Suite are exclusive of GST.
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