How to know how much to pay your new employee.

So, you’ve made the decision to grow your team, but what are you going to pay them? There are three main things to consider when deciding on pay:

  • What is the minimum legislative requirement?
  • What is the industry norm or expectation?
  • What is a viable amount for your business?

Minimum Wage and Modern Awards

Starting with the lowest end of the scale in mind can help to get some perspective. In Australia we have both our national minimum wage, and then over 100 different Modern Awards which set out minimum rates for a whole range of different industries and roles. If a Modern Award applies to your industry, or to the role you are looking to hire, you will find a Pay Guide attached which sets out all the rates that will apply for the different role classifications, including things like weekend rates, overtime rates and other allowances and penalties.

For entry level roles, or roles requiring less skill or experience, Modern Award minimums will be a useful guide. However, for more skilled roles, senior level roles or roles that aren’t covered by a Modern Award, there is a bit more to consider…

Industry Norms

While there is generally an understanding that small businesses cannot match the large salaries that employees might get in corporate-land, and there are other benefits on offer (like flexibility, purpose, and autonomy), you will still want to be competitive in the market.

A few places you can look for guidance on what salaries are appropriate in your industry currently are:

  • Seek or other job boards – Some roles will advertise the salary they are paying – handy! But even if salaries are not advertised, you can still get a gauge by inputting a salary range into the search with your relevant industry and keywords and review the jobs that come up to see if they align with what you are looking for.
  • Salary guides – Many large recruitment firms will publish salary guides each year that you can download from their sites by parting with your contact details. These are often split by industry, experience level and even state to give you an idea of the roles within your local market.
  • Your network – chances are you know someone who works in a similar role to what you are looking for, or you know someone who has hired into that role recently – if you feel comfortable, as them for their knowledge on an appropriate range.
  • Recruiters – While the salary guide above is handy for a broad understanding, recruiters (especially those who work specifically in your industry) will have a finger on the pulse of what candidates are asking for and what is getting them across the line, right now.
  • Candidates – Go straight to the source. Pop out your ad and ask those that apply what they would expect the salary to be for this role. While this might be leaving things a bit late in the process if you need to drastically change the role requirements to suit your budget, its great, live, real data from those most interested in working with YOU.

Your business

Understanding what is the most viable salary to pay for your business will vary and be dependent on things like your business model, revenue, expenses, margins and more. When considering how much you could pay, it’s important to remember to incorporate things like:

  • Base salary
  • Superannuation (10.5% from 1 July 2022 with further increases coming, check out the ATO for more information on this)
  • Penalty rates and allowances within applicable Modern Awards (in particular higher rates for weekends, out of hours, travel and more)
  • Annual Leave and Personal/Carer’s (Sick) Leave (for permanent employees)
  • Set up costs of technology hardware and software (all those extra licences can add up)
  • Workers Compensation Insurance (if you don’t have any employees yet, you will need to purchase this)
  • Professional development and employee experience– great to have some extra in the kitty to spend on fun activities together, or being able to invest in their learning


If you feel like you need further help with recruiting and growing your team, Davy Partners assists clients through our hourly recruitment support service so you can better manage the process and associated costs. Get in touch!
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