Articles

What your first hire actually costs

25 August 2026 · 8 min read · Gnarly by Nature Pty Ltd

The first hire is the hardest decision a small trade business makes, and it usually gets made on the wrong number. Somebody works out they can afford a wage, hires, and finds out over the following six months that a wage was not what they were buying.

Everything that comes with the wage

Whatever you agree to pay, the actual cost to the business is meaningfully higher. The pieces, roughly in order of size:

• Superannuation. A percentage on top of ordinary earnings. The rate has been rising in steps, so check the current one rather than trusting a number in an article.
• Annual leave and public holidays. Four weeks plus public holidays is roughly a tenth of the year you pay for and get nothing back.
• Sick leave. Budget for it being used, because it will be.
• Workers compensation. Varies by state and by trade, and it is not small in construction. Get your actual rate.
• Leave loading, allowances and penalties if the award or agreement covering them says so. Check which one does. Getting this wrong is expensive backwards.
• Tools, PPE, phone, and a spot in a vehicle.

Add those up honestly and the loaded cost of an employee usually lands somewhere well north of the wage. The exact multiplier depends on your state, your trade and your award, so work out yours rather than borrowing a rule of thumb.

The cost nobody puts in the spreadsheet

Here is the one that catches people, and it is the reason the first hire so often feels like it made things worse before it made them better.

You get slower.

For the first stretch, you are checking their work, answering questions, driving out to look at something, and redoing the odd thing. That time comes off your billable hours, which were the most valuable hours in the business. A first hire who takes 20 per cent of your week for three months has a real cost that never appears on a payslip.

This is temporary and it is worth it. But if you budget as though it does not exist, the first quarter looks like a disaster and people panic and let someone go two months before it would have come good.

Working out whether it stacks up

Two numbers.

What they cost per billable hour

Take the fully loaded annual cost, then divide by the billable hours they will actually deliver. Not the hours they are on site: the hours you can invoice. A new employee is not billable while they are being shown something, and an apprentice is billable for less of their week than a qualified tradie.

What they bring in per billable hour

Your charge out rate for that person's work. If you charge $110 an hour for a second set of hands and they cost you $70 an hour billable, the gap is $40 an hour. That gap has to cover the slowdown in your own week, and then everything after that is why you hired.

The question is not "can I afford the wage". It is "how many billable hours a week do they need to hit before this is worth it", and then "is that realistic in my first six months".

The order that works

The businesses that get this right tend to do it in the same order.

1. Have more work than you can do, for long enough to believe it. Two flat out months is a season. Six is a pattern.
2. Get your admin under control first. A second person multiplies your paperwork. If quoting and invoicing already run late with one of you, they will not survive two.
3. Know your margins per job type before you hire. Otherwise you scale the work that loses money, which is the fastest way to be busier and poorer at the same time.
4. Then hire, and expect the first quarter to be flat.

Apprentice or qualified tradie

Different decisions, not cheaper and dearer versions of one.

An apprentice costs less per hour and much more of your time, and does not pay off properly for a couple of years. You are investing, and there are incentives and obligations attached that are worth understanding properly before you commit. Hire one when you can afford to teach.

A qualified tradie costs more and can be billable in a fortnight. Hire one when you need capacity now and cannot afford the teaching time.

The mistake is hiring an apprentice because it is cheaper when what you needed was capacity. You get neither.

Award rates, superannuation and employment obligations change and vary by state and trade. Check the current position with Fair Work and your accountant before you commit to anything here.

Drizzy in your trade

He works the same whatever you do, but the words change. Pick your trade and see what it looks like.

More

What your hourly rate actually needs to be

Most people price off what the bloke down the road charges. Here is the arithmetic that tells you what you need, which is usually a different number.

Your busiest month was probably not your best

Revenue tells you how much came in. It does not tell you which work was worth doing. Here is how to find the jobs quietly costing you money.

Getting paid without chasing

Chasing money is a symptom. The fix is almost always earlier in the job than the invoice — in what you wrote down, and when you sent it.