Ask a founder what a US hire costs and they’ll quote you a salary. The salary is the start of the answer, not the end of it. By the time you add employer on-costs and health cover, the real number is well above the headline, and budgeting off salary alone is how US hiring plans blow out.

In this article, we walk through how US base salaries compare to Australian ones, why on-costs work differently in each country, why health cover is the line founders most underestimate, and what the all-in cost actually looks like side by side.

Start with the base

For comparable roles, US salaries usually sit above Australian ones, particularly in tech hubs and particularly for sales and senior engineering. So the number you benchmark against at home is already low for the US market.

On-costs work differently in each country

On top of the base sit employer on-costs, and here the two countries look different from how founders expect.

In the US the statutory ones are FICA, the employer’s share of Social Security and Medicare at 7.65% up to the Social Security wage base, plus federal and state unemployment and workers compensation, which together usually land around 10% of salary.

In Australia, by the time a company is big enough to be expanding overseas it’s almost certainly over the payroll tax thresholds, so the statutory load is the 12% super guarantee, payroll tax at an average of around 5% across the states, and workers compensation, which together come to roughly 18-19%. So on statutory on-costs alone, Australia is the more expensive of the two.

The reason a US hire still costs more overall is not payroll taxes. It’s health cover, the benefits US employers are expected to offer, and higher base salaries.

The line Australians most underestimate: health cover

At home Medicare carries it. In the US it’s the employer’s job and a real cost, typically around US$8,000 a year for a single employee and US$20,000 for one with a family.

A solid plan is an expectation, not a perk, and a weak offer costs you in hiring, so budget for it from the first US hire.

Beyond health: the benefits founders need to budget for

Expect to offer benefits that are standard in the US market, such as a 401(k) with some employer match and competitive paid time off. These aren’t legally required in the way payroll taxes are, but in practice you need them to hire well.

Why an Employer of Record is worth considering early

If all of that sounds like a lot to stand up for one or two people, it is, which is the case for starting through an Employer of Record. An EOR bundles payroll, compliance and a benefits package including health into a single per-head fee, which is often the cheaper and faster route until you have enough US staff to justify your own entity.

A senior engineer, side by side

In Australia, on a base of A$160,000, you add roughly 12% super, about 5% payroll tax and 1-2% workers compensation: call it 18-19% on top of base, with no employer health cost because Medicare carries it.

In the US, the same person commands a higher base, say US$180,000, and on top of that you add about 10% in payroll taxes plus employer health cover, a 401(k) match and other expected benefits, which together come to roughly 25-30% on top of base.

So the all-in on-cost is lower in Australia, around 18-19% against 25-30% in the US, and the US is dearer again because the base itself is higher.

The practical takeaway

Budget the all-in cost, not the salary. Once you layer on-costs, health and benefits onto the base, a US hire commonly runs around 25-30% above base, sometimes more with a richer package, and your US hiring plan should be built on that from the first hire.

Disclaimer: This article is for general informational purposes only and does not constitute financial, legal or tax advice. Please speak with a qualified adviser (hey, that’s us!) before making decisions based on your specific circumstances.