You know you need help. The work is piling up, you're turning things down, and your existing team is stretched. Everything points to hiring. But there's a gap between needing another person and being able to afford one, and getting that wrong can put genuine pressure on a business that was otherwise doing fine.
This isn't about whether you should hire. It's about whether you can, right now, with the cash flow and revenue you actually have. And if you can't yet, what to do in the meantime so you don't stall.
The most common mistake is looking at the salary number in isolation. A role advertised at $85,000 does not cost your business $85,000.
In Australia, the real cost of an employee includes superannuation (currently 11.5%, rising to 12% from 1 July 2025), payroll tax (if you're above your state threshold, $1.2M in NSW, $900K in VIC, $1.6M in QLD), workers compensation insurance (0.5% to 5%+ depending on industry), leave entitlements (annual leave, personal leave, public holidays, worth roughly 8 to 10 weeks of paid non-working time per year), equipment and software, recruitment costs, and the training and ramp-up period where they're being paid but not yet productive.
As a rule of thumb, multiply the base salary by 1.3x to 1.5x to get the true annual cost. That $85,000 salary is really $110,000 to $128,000 when everything is included.
For roles requiring recruitment agencies, add another 15% to 20% of salary as a one-off cost. For a senior hire, that's $12,000 to $25,000 before they've started.
You can use our employee cost calculator to see the fully loaded cost for any role, including super, payroll tax, leave, and overheads specific to your state.
Revenue per employee is one of the simplest benchmarks for hiring readiness. It tells you how much productive output your business generates relative to its people cost.
Benchmarks vary significantly by industry. Professional services firms typically need $150,000 to $250,000 in revenue per employee to be healthy. Trades and construction businesses often operate at $200,000 to $350,000 per employee given higher materials and equipment costs. Retail and hospitality run lower, often $80,000 to $150,000, because the model depends on higher headcount. Technology and SaaS businesses can run $200,000 to $500,000+ per employee depending on stage and product.
To calculate yours: take your annualised revenue and divide by your total headcount (including yourself). If you're at or below the low end of your industry range, adding another person without proportionally increasing revenue will compress your margins. If you're well above the range, that's a signal you might be under-resourced and leaving growth on the table.
The question isn't just whether you can afford the salary. It's whether adding this person will maintain or improve your revenue-per-employee ratio within 6 to 12 months.
Even if the economics work on paper, cash flow timing matters. A new hire starts costing you money immediately, their first pay run is usually within two weeks, but their productive contribution ramps up over weeks or months.
Before hiring, check three things.
First, do you have enough cash reserves to cover 3 to 6 months of the new role's fully loaded cost without relying on revenue that person will generate? This is your safety margin. If the hire takes longer to ramp up than expected, or if revenue dips temporarily, you need the runway to absorb it.
For that $85,000 role costing $115,000 fully loaded, that means $29,000 to $58,000 in accessible cash reserves earmarked for this purpose, on top of your normal operating buffer.
Second, look at your cash flow pattern. Is revenue consistent month to month, or does it swing? Businesses with lumpy or seasonal revenue need larger buffers. Hiring during your peak season and hoping the revenue sustains year-round is a common trap.
Third, what's your current monthly cash burn relative to revenue? If you're already spending 90%+ of what comes in, adding a significant new cost without a clear path to increased revenue is risky.
Every hire should have a rough break-even calculation, even if it's not precise. Ask: what does this person need to produce, save, or enable for the business to at least cover their cost?
For a revenue-generating role (sales, account management), this is relatively straightforward. If the role costs $120,000 fully loaded and your gross margin is 40%, they need to generate $300,000 in new revenue to break even.
For an operational or support role (admin, finance, operations), the calculation is less direct but still important. How much of your time, or another senior person's time, will this role free up? What's that time worth? If hiring an operations manager at $120,000 frees up 15 hours per week of the founder's time, and the founder can use that time to win $200,000 in new business, the maths works. If the freed-up time just means the founder goes home earlier, the financial case is weaker (though the personal case might be strong).
Be honest about whether the revenue or savings you're projecting are realistic and within what timeframe. Most hires take 3 to 6 months to reach full productivity. Senior hires can take longer.
This is where most advice stops, with a suggestion to just wait until you can. That's not helpful when the work still needs doing.
There are several ways to get the capability without the full cost of a permanent hire.
Contractors and freelancers let you buy specific outputs rather than ongoing time. You pay more per hour but only for the hours you need, with no leave, no super, no payroll tax (assuming the arrangement is genuinely contracting). This works well for project-based work, specialised skills you need occasionally, or testing whether a role is viable before committing to a permanent hire. Use our contractor vs employee calculator to compare the true costs side by side.
Outsourced teams work when you need ongoing capability across multiple skill levels but can't justify full-time headcount. Finance, HR, marketing, and customer service are common functions where an outsourced team covering 10 to 20 hours per week can replace what would otherwise require a full-time hire at 2x to 3x the cost.
Automation and systems should always be explored before hiring. If someone would spend half their time on data entry, reconciliation, or manual processes that software could handle, you might need a $50/month tool rather than a $75,000/year person. Look at your processes before you look at headcount.
Part-time and fractional hires split the difference. A fractional CFO at $3,000/month gives you strategic finance capability that a full-time CFO at $25,000/month would provide, just at fewer hours. Same with fractional marketing leads, operations managers, and other senior roles.
The principle is the same in every case: match the solution to the actual hours of work required, not to the job title.
Not ready to hire a full finance team? Scale Suite provides embedded finance capability for Australian SMEs from $2,500/month, covering bookkeeping, payroll, BAS, reporting, and CFO oversight. It's designed for businesses that need the function but can't justify the headcount. See how we compare to hiring or book a 30-minute call.
Before you commit to a hire, run through these:
Your revenue per employee is at or above your industry benchmark. You have 3 to 6 months of the role's fully loaded cost in accessible cash reserves. You can articulate specifically what this person will do in their first 90 days. You have a realistic break-even calculation showing when the role pays for itself. Your cash flow can absorb the cost during the ramp-up period without creating stress. You've explored whether contractors, outsourced teams, or automation could solve the same problem at lower cost and risk.
If you tick all six, you're in a strong position to hire. If you're missing two or more, it's worth exploring alternatives that give you the capability without the full commitment, at least until your financials catch up with your ambition.
The worst outcome isn't waiting to hire. It's hiring before you're ready, finding yourself cash-strapped three months later, and having to let someone go. That costs more, financially and culturally, than taking the slower, more deliberate path.
How much does it really cost to hire an employee in Australia?
The true cost of an employee in Australia is 1.3x to 1.5x their base salary. For an $85,000 salary, the fully loaded cost including superannuation (11.5%), payroll tax (if applicable), workers compensation, leave entitlements, and overheads is approximately $110,000 to $128,000 per year. Add recruitment agency fees of 15% to 20% for the initial hire, and the first-year cost can exceed $140,000.
What revenue per employee should my business target?
Revenue per employee benchmarks vary by industry. Professional services: $150,000 to $250,000. Trades and construction: $200,000 to $350,000. Retail and hospitality: $80,000 to $150,000. Technology: $200,000 to $500,000+. If your revenue per employee is below the low end of your industry range, adding headcount without proportionally increasing revenue will compress margins.
How much cash should I have before hiring?
You should have 3 to 6 months of the role's fully loaded cost in accessible cash reserves before hiring, on top of your normal operating buffer. For an $85,000 role costing $115,000 fully loaded, that's $29,000 to $58,000 earmarked specifically for this hire. Businesses with lumpy or seasonal revenue should target the higher end of this range.
When should I outsource instead of hiring in Australia?
Outsourcing makes more sense when the capability you need requires fewer than 25 to 30 hours per week, when you need expertise across multiple skill levels (for example bookkeeping plus reporting plus strategic input), when you can't justify the fully loaded cost of a permanent hire, or when you want to test whether a function adds value before committing to headcount. Finance, HR, and marketing are the most commonly outsourced functions for Australian SMEs.
What's the cost difference between hiring a finance manager and outsourcing finance?
A finance manager in Australia costs $130,000 to $180,000 per year fully loaded, and their scope is limited to one layer of your finance function. An outsourced finance team covering bookkeeping, payroll, BAS, monthly reporting, and CFO-level oversight typically costs $30,000 to $72,000 per year ($2,500 to $6,000/month), delivering broader capability at 20% to 50% of the cost of a single internal hire.
How long does it take a new employee to become productive?
Most employees take 3 to 6 months to reach full productivity. Senior or specialist roles can take longer. During this ramp-up period, you're paying full salary plus super and overheads while receiving partial output. This is why cash buffer planning is critical, your business needs to absorb 3 to 6 months of cost before the hire breaks even.
Scale Suite delivers embedded finance and human resource services for ambitious Australian businesses.Our Sydney-based team integrates with your daily operations through a shared platform, working like part of your internal staff but with senior-level expertise. From complete bookkeeping to strategic CFO insights, we deliver better outcomes than a single hire - without the recruitment risk, training time, or full-time salary commitment.
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