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Labour Cost Calculator (Australia)

See labour as a share of revenue and work out what overtime is really adding to the bill.

Your numbers

Set to match your award or agreement
Labour cost share
 
Share
What is a good labour cost percentage?

It varies widely by sector. Service and hospitality businesses often run high, while capital-heavy industries run lower. The useful comparison is against your own trend and against businesses in your industry, rather than a single benchmark.

Where Compono fits

A labour percentage tells you the size of the cost. It does not tell you why overtime keeps recurring, which usually traces back to the wrong people in the wrong roles, gaps in capability, or churn that leaves teams short. Those are people-insight questions that payroll reports cannot answer. Compono works on that side of the ledger, built on decades of psychometric research rather than AI hype. We hold a 4.8/5 rating on Capterra and are used by government departments and mid-market employers across ANZ.

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How it's calculated

Labour cost percentage equals total labour cost divided by revenue, multiplied by 100. Overtime cost equals OT hours multiplied by the hourly rate and the penalty multiplier you set. Australian penalty rates are set by the relevant award or enterprise agreement, so the multiplier you enter should match your instrument (the Fair Work Commission publishes the rates by award). We then show OT as a share of total labour, so you can see how much of your wage bill is premium time.

New to the term? Read the plain-English definition of penalty rates in the HR Glossary.

Common questions

How are Australian overtime penalty rates set?

They are set by the modern award or enterprise agreement that covers the role, and they vary by day, time, and hours worked. The Fair Work Commission publishes the rates. Enter the multiplier that matches your instrument for an accurate figure.

Does this include superannuation and on-costs in labour cost?

That depends on the figure you enter. For a complete labour cost percentage, use a total labour cost that already includes superannuation, on-costs, and overtime, not just base wages.

Why does overtime matter beyond the cost?

Persistent overtime signals that the work and the workforce are out of balance. It raises burnout and turnover risk, which adds rehiring and retraining costs on top of the penalty rates, so the visible OT bill understates the real impact.

This page is general information, not legal advice. We check figures annually and update them on a best-efforts basis, but employment rules change and we cannot promise everything here is current or complete. Before you act on it, confirm the detail with the Fair Work Ombudsman or your own adviser. Last reviewed July 2026.