In This Blog:
Planning to hire offshore talent, but unclear salary averages online are blurring your way forward?
You want to find out if outsourcing transition costs, from hiring locally to hiring remotely, is worth the price before taking the plunge. You want to know hourly rates per specialisation so you can compare one hiring agency’s numbers with the next.
But when online averages and outsourcing pricing models aren’t providing you with practical insight and many offshore hiring agencies are asking for some sort of commitment before they give you answers, how do you calculate outsourcing costs in Australia?
With the Remote Staff FREE VA Calculator.
You read that right, it’s FREE, and it’s easy to use.
No extra steps or paying up front required. Just let the calculator do the maths for you.
Before you work your way through the numbers, learn about what you’re actually measuring.
Before How To Calculate Outsourcing Cost: Which Of The Tasks You’re Doing Aren’t “Free”
The concept behind this is known as the “silent salary.” It explains how your time as a business owner has its own price. So does the time you waste by spending it on things that have little business value.
Here’s a simple formula that reframes it:
Silent Salary = (Your Hourly Rate) × (Hours per Week on Low-Value Tasks) × 4 (ave. no. of weeks per month, rounded off from 4.33)
Every hour you spend on admin responsibilities or self-training for specialised roles is an hour you’re not billing, selling, or growing. At AUD $120 an hour, 15 hours a week adds up to AUD $7,200 a month in time that went to the wrong work.
It’s spending that doesn’t come back to you as revenue.
What To Do: List down your daily tasks that have nothing to do with how you manage your business. This will set the tone as you calculate the cost of offshore hiring.
Why Most AU Business Owners Get the Maths Wrong On Outsourcing Cost Estimation
The Loaded Cost Gap or the Loaded Cost “Trap” describes why hiring locally isn’t bound by the confines of a base salary. You’re adding payroll tax, which varies by state. You’ve got annual and personal leave entitlements, all mandatory according to the National Employment Standards.
That’s just the visible tip of the staffing cost iceberg. Onboarding time is 4-6 weeks’ worth of non-productivity. Software licenses, equipment, and desk or office space are other layers buried in the ice.
The Chill of the Ask: What Is the Superannuation Guarantee for 2026?
Effective July 2025, governed at the federal level by the Australian government, the Superannuation Guarantee (SG) requires Australian employers to pay 12% of an employee’s ordinary earnings (up from 11.5% previously) on top of base salary.
This new addition to mandatory payroll costs means base salary is compounded with:
- Leave entitlements
- Insurance
- onboarding downtime
- infrastructure costs
And you’re not even computing according to specialist expertise and experience level yet.
What To Do: Regarding in-house vs outsourcing costs, outsourcing will show you friendlier overalls. When comparing outsourcing options, look at the all-in rate. Some agencies quote a base salary. Others still include add-ons like leave entitlements. That’s no reason to pause. The all-in, no hidden outsourcing costs figure, and the total cost of ownership outsourcing reveals, comes in well below what a local hire costs you. Ask upfront which total you’re looking at.
Worth Noting: The silent salary shows what your time costs, and the loaded cost trap shows what a local hire costs.
Outsourcing Cost Breakdown Formula: How To Calculate Total Cost of Outsourcing?
The four-step formula for calculating outsourcing costs in under 20 minutes:
#1. Work Out Your Own Effective Hourly Rate
What is your time worth? Not asking philosophically. There’s a dollar equivalence to this.
Before you add up outsourcing costs, you need this one number first. It’s effectively what your hourly rate is as a business owner, and it’s what makes every other calculation in this process tailored to you.
Set Your Baseline Rate: Calculate Your Time
Take the annual income you draw from your business and divide it by 2,080 (number of working hours in a standard year: 52 weeks at 40 hours each).
Use 2,080 hours as the baseline, then compute annual revenue (or personal income drawn) ÷ actual working hours per year.
Here’s an example:
AUD $197,600 ÷ 2,080 hours = AUD $95 hourly rate = (Your) Effective Hourly Rate
So how much does your time actually cost? If your business brings in AUD $197,600 a year, the answer is AUD $95. That’s the real dollar amount on paper. Use it to put a tangible figure on your daily and hourly tasks.
This is what business owners often brush aside. They don’t account for the dollar amount of each hour they spend on what should be delegated to someone else.
What To Do: Take a look at last year’s revenue figure and divide it by 2,080. Write that number down and hold on to it; you’ll need it for every step that follows.
#2. Audit the Hours You’re Spending on the “Wrong Work”
Track one week of tasks. Try last week’s (rough log). In a sheet, create two columns: column one for tasks that require specific expertise and column two for ones that don’t. For the latter, this includes inbox management, calendar scheduling, data entry, tutorials or skills learning (for specialisation or skills upgrading), and basic research.
Name the total hours in column two as your “delegation inventory.” Defined simply, these are hours spent on things you shouldn’t be doing yourself, or doing at all.
If you’re only now deciding to build a team, that’s all the more reason for you to hire remotely.
Moment of Realisation
“Many AU SME owners see 10 to 20 hours per week under the delegation inventory column (column two).”
Illustration: Rachel runs an 8-person accounting firm. She and her team work directly from the main Brisbane office. She spends somewhere around 12 hours a week checking inboxes, chasing outstanding invoices, and going over call logs.
Her effective hourly rate (from Step 1) is AUD $95.
The math: 12 hours × AUD $95 × 4 weeks = AUD $4,560/month in time value, doing work a VA could handle
Rachel pays her VA AUD $1,200 a month. Her monthly savings before factoring in any extra revenue from freed-up time = AUD $3,360.
#3. Calculate the True Cost of the Outsourced Role (Cost-Benefit Analysis Outsourcing Data)
This is where the comparison happens. Let’s take a standard local admin hire as the reference for this table’s computation.
Local Admin Hire Average Salary (AUD): SAMPLE ROLE & COST
Outsourcing changes every element in this table. There’s technically no superannuation obligation outside Australia. The exact add-ons depend on the agency and the engagement structure, but the point is: your hire’s location pulls the total cost down.
You’re paying for the same-quality hire. The difference is that they’re in a different part of the globe, where the cost of living is less than where you are.
For Australian businesses hiring through Remote Staff, that total comes in at a fraction of what a local hire costs in year one alone.
What To Do: Go back to your delegation inventory under #2. Consider hiring part-time if you’ve got 10–15 hours of weekly tasks to hand over. Full-time if it’s more than that.
#4. Run the ROI Check: Outsourcing Financial Analysis
The ROI check tells you whether hiring an offshore worker makes financial sense for where your business is right now. Using Rachel’s numbers as an example, here’s the formula:
(Your Hourly Rate × Hours Delegated Per Week × 4) – VA Monthly Cost = Net Monthly Gain =
(AUD $95 × 12 hours × 4 weeks) − AUD $1,200 = AUD $3,360 net monthly gain
Give it 2 to 3 months. AU businesses typically begin to notice the payoff within 60 to 90 days, when simple, repetitive tasks are clearly outlined from the beginning.
90-day Timeline Caveat: Expect a wider time for complex tasks without SOPs, since they take longer to hand over.
Illustration: Tom has been running his business in Melbourne for over a year. He sells homeware direct-to-consumer (DTC). A part of his week is consumed in going over customer service emails, following up on suppliers, tracking orders, and answering order queries.
After hiring a part-time VA through Remote Staff at $AUD 800 per month, he’s able to free 15 hours from his weekly schedule, and allots those to wholesale partnerships. Within 90 days, he’s locked in two new wholesale accounts, each worth $3,200 monthly in additional revenue.
Tom’s ROI isn’t merely time saved, but revenue created because of it.
What To Do: Review your numbers using the formula above. More preferably, use the Remote Staff FREE Outsourcing Calculator to generate your personalised estimate in less time.
Taking The Pressure Of The Hiring Process Off Your Shoulders
Maybe you’re still warming up to the idea of outsourcing or offshore hiring. Maybe you want to add more remote workers to your growing team. Whatever your hiring need, and whether you’re thinking about full-time, part-time, or project-based roles, Remote Staff is here for you.
Let us answer your questions about “How to charge for outsourcing services.” We’ve been placing remote professionals with Australian businesses for 18+ years. We’re confident and experienced in how we handle placement, as we screen candidates for hands-on experience for every specialisation, industry, and business size.
Your future hire isn’t tied to Australia’s Superannuation Guarantee. Equivalent add-ons vary by country and agency. But the fact remains that market location is your advantage regardless. And it’s always good to see the numbers yourself with our outsourcing calculator.
FAQs
What is the formula for calculating actual cost?
Use two formulas, starting with your offshore hire’s base rate plus applicable agency fees. Place that side by side to the same role, at a local cost: base salary, superannuation at 12%, leave entitlements, payroll tax, equipment, and onboarding downtime. You should be looking at a local as well as an remote Actual Cost. Substract one from the other, and the total is your Cost Advantage.
Cost Advantage = Local Hire Total − Actual Outsourcing Cost
How much does outsourcing payroll cost in Australia?
Add the base rate to any agency or management fees, then subtract what you’d otherwise pay for a local hire. Do two separate calculations: one where leave, payroll tax, and onboarding costs are included, and one with only the base salary. The net figure of either one is almost always lower than a local hire, often significantly so.
What’s the difference between outsourcing cost and outsourcing value?
Cost is the dollar amount you pay the remote worker. Value is the time you get back from outsourcing, and what you can now do with it, like focusing on work that brings in revenue.
How many hours per week do I need before outsourcing makes financial sense?
Aim for at least five to eight hours of clearly defined, repeatable tasks per week before hiring. This is the practical threshold. Above ten hours, and the maths will tell you that it makes more than financial sense.
How long before I see ROI from a virtual assistant in Australia?
Most AU businesses with clear task documentation and an active workload witness measurable ROI within 60 to 90 days. Businesses starting without documented processes need a full quarter or more. Things move faster when your tasks are clearly laid out before your remote hire begins.
You’ve Calculated the True Cost Of Hiring Remotely. Pursue The Hire.
There’s no such thing as “free” when it comes to offloading yourself from tasks that should be done by someone else. But the numbers are much more agreeable when you choose to hire remotely than locally.
As a business owner, your hours should be earmarked to responsibilities that directly affect your business, like making decisions, bringing in revenue, partnering with other businesses, and winning clients.
No more hours spent on tasks that have nothing to do with managing your business. No more confusion on direct and indirect outsourcing costs. You need offshore specialists who are already excellent at doing those things, so you can put your time and effort into working on your business goals instead.
The calculation is simple. The outsourcing savings calculator? Even simpler to use.
Whether you want to hire a virtual assistant Australia trusts, work with Estimators, or whatever the role you need, get the numbers right and hire offshore through Remote Staff.
Vaune Everis Cura has always been a writer in the truest sense, drawn to the art both as a personal creative pursuit and as a profession. Her experience penning content across digital marketing spaces and collaborating with business owners and market shapers has broadened her craft to include strategic direction and SEO insight. Having spent years with the InterContinental Hotels Group before stepping boldly into freelancing, she understands that at the centre of it all are genuine, meaningful brand–customer relationships built on purposeful, human content.
