What your first employee really costs (it is not the wage)

You pay $34 an hour and charge the customer $60. That feels like a $26 margin.

It is not.

## The on-costs On top of the wage: - Superannuation — 12% from 1 July 2025. - Workers compensation — varies by state and industry, commonly around 2–5% of wages for this kind of work. - Leave — four weeks annual, plus public holidays, plus sick leave. Call it six weeks of paid non-working time. - PPE, uniform, phone, training — a few thousand a year.

## The bigger factor: billable time Your employee is paid for 38 hours. They are not billing 38 hours. Travel between jobs, setup, pack-down, loading, refuelling, the job that gets rained out, the customer who is not home.

Realistically 60–70% of paid hours are billable.

## The number Run $34 an hour, 38 hours a week, 12% super, 3.2% workers comp, six weeks of leave, $3,800 of other on-costs, at 65% billable:

• Total annual cost: roughly $92,000
• Billable hours a year: roughly 1,140
• Cost per billable hour: about $80

Charging that worker out at $60 an hour is losing money on every hour they work. And you would not know for six months, because the revenue looks fine.

## What to charge At a 45% target margin, you need a charge-out rate around $145 per billable hour. That is roughly 4.3 times the raw wage — which sounds outrageous until you do the arithmetic above.

This is why fixed-price quoting matters so much once you have staff. You are not selling hours; you are selling a finished driveway, and your job is to make sure the job's price clears the cost of the time it consumes.

## Before you hire Three things must be true: 1. You are turning work away, consistently, for two months. 2. You have twelve weeks of fixed costs in the bank, including the new wage. 3. The job is written down. A process nobody has documented cannot be delegated.

Miss any one of those and wait.