The salary is just the beginning

When business owners think about hiring a salesperson, they focus on the base salary. But the true cost of an Australian sales hire is typically 1.5 to 2 times the base salary when you account for all the associated expenses.

Understanding these costs helps you make informed decisions about whether to hire or use commission only alternatives.

Breaking down the costs

Base salary

A mid level sales representative in Australia earns between $70,000 and $100,000 per year. Senior sales reps and account executives command $100,000 to $150,000.

Superannuation

Currently 11.5% of base salary (increasing to 12% by 2025). On a $90,000 salary, that is $10,350 per year.

On costs

Workers compensation insurance, payroll tax (varies by state, typically 4.85% to 6.85% on payrolls over the threshold), leave loading, and other statutory obligations. Budget 5% to 10% of salary.

Equipment and tools

Laptop, phone, CRM software licences, sales tools. Budget $5,000 to $8,000 per year.

Training and ramp time

Most sales reps take 3 to 6 months to become fully productive. During ramp up, they earn full salary but produce little or no revenue. The opportunity cost of a 4 month ramp at $90,000 salary is $30,000 in salary paid for minimal output.

Management time

Someone needs to manage, coach, and review the salesperson. If a sales manager spends 20% of their time on one rep, allocate 20% of the manager's cost.

Recruitment

Recruitment fees (15% to 25% of annual salary), job advertising, interview time. Budget $15,000 to $25,000 per hire.

Total annual cost

For a sales rep earning $90,000 base: approximately $140,000 to $170,000 per year when all costs are included. And this excludes commissions and bonuses on top of the base.

The commission agent comparison

A commission only agent on Zepys costs zero until they make a sale. No super, no equipment, no ramp time, no recruitment fees. Your entire sales cost is a percentage of actual revenue generated.

If your commission rate is 20% and an agent generates $200,000 in revenue, your cost is $40,000. The same revenue from a salaried rep costs $140,000 to $170,000 including their base and on costs.

When salaried hires make sense

The cost premium of a salaried hire is justified when you need dedicated, full time availability, deep product specialisation, and full control over the sales process. For complex enterprise sales with six figure deal sizes, the investment often pays off.

The bottom line

The true cost of a sales hire in Australia is significantly higher than the base salary. Before committing to that cost, consider whether commission only agents through platforms like Zepys could achieve similar results at a fraction of the price.