A busy practice can make hiring another accountant look like the obvious solution. But the salary is often the easiest part of the calculation.
The real cost starts before the new accountant becomes productive. Recruitment, onboarding, training, supervision and review all require time and money. Then there is the ongoing cost of carrying that role when workload changes.
And if the hire does not work out, the practice can end up paying for the same capacity twice.
For an Australian accounting firm, the better question is not simply, “Can we afford another accountant?”
It is:
“What will this hire actually cost the practice, and will the value of the additional capacity justify it?”
That is where the hidden cost begins.
The Salary Is Only The Starting Point
Say a firm budgets $100,000 for a new accountant.
The immediate calculation looks straightforward:
| COST | ANNUAL AMOUNT |
| Salary | $100,000 |
| Superannuation at 12% | $12,000 |
| Salary + super | $112,000 |
The 12% superannuation rate applies from 1 July 2025.
But $112,000 is still not the full cost of employing that accountant. Recruitment, onboarding, training, technology, leave, supervision and other employment-related costs sit outside the simple salary calculation.
Some costs will also depend on the firm’s circumstances, such as payroll tax, workers compensation and other employment obligations. So the number on the job advertisement is a starting point, not the business case.
The First Cost Is Getting The Hire Productive
The practice starts paying before the new accountant is necessarily producing at the level expected of the role.
Someone has to introduce the firm’s systems and processes, explain client requirements, answer questions, review work and correct issues while the accountant learns how the practice operates.
The time involved may be relatively small for an experienced hire joining a well-documented workflow, or considerably greater when the role requires more training and supervision.
That creates an important distinction:
One additional employee does not automatically mean one additional equivalent unit of productive capacity from day one.
The existing team helps create that capacity. Their time is part of the economic cost of the hiring decision, even though it does not appear on the new accountant’s payslip.
The Cost Changes When Workload Changes
The economics become less straightforward when the workload that triggered the hire is not permanent.
A practice might be under sustained pressure during a major compliance period, after winning several new clients or while clearing a significant backlog. Hiring can look entirely reasonable at that point.
The question is what happens afterwards.
A permanent employee remains an ongoing cost even when the additional workload falls. The practice still has the salary and associated employment costs, while the amount of work available to keep that person fully productive may change.
That does not make hiring wrong. It means the practice needs to distinguish between a permanent workload problem and a temporary capacity problem.
The relevant question is not:
“Do we have enough work for another accountant today?”
It is:
“Will we have enough consistent work to keep this role productive over the longer term?”
That distinction matters because permanent headcount is much harder to scale up and down than workload.
Your Existing Team Pays Part Of The Cost Too
The hidden cost can also sit with the people already working in the practice.
During the ramp-up period, a manager may spend time reviewing the new accountant’s work. A senior accountant may answer questions or explain client-specific processes. A partner may need to step in when an issue requires context the new hire has not yet developed.
None of that is necessarily wasted time. Good onboarding and review are essential.
The cost comes from what that time replaces.
| Time Spent Supporting The Hire | Potentially Displaced Work |
| Reviewing and correcting work | Existing client work |
| Training and answering questions | Senior accounting or advisory work |
| Managing workflow and follow-ups | Practice management |
| Supporting performance and development | Business development or team leadership |
The simple way to think about it is:
Opportunity cost = senior-team time spent supporting the hire × the economic value of that time
The exact value will differ between practices, so there is no useful universal hourly figure to insert. The important point is that the cost exists even when it never appears as a separate expense.
When The Hire Does Not Work Out
The economics become worse when the accountant does not deliver the expected level of output.
Work may require additional review. Errors may create rework. Deadlines may require intervention from more senior staff. If the shortfall continues, the practice may have to redistribute the workload or begin looking for another accountant.
That can turn one hiring decision into two rounds of recruitment and onboarding.
The original recruitment and ramp-up costs have not disappeared simply because the person leaves. The practice has also carried the cost of the gap between the capacity it expected to gain and the capacity it actually received.
This is where a seemingly manageable hiring decision can become significantly more expensive than the original salary suggested.
What Does The Hire Need To Deliver?
This is the calculation that matters most.
Instead of asking whether the practice can afford a $100,000 salary, start with the total annual cost of the role.
A useful model is:
True annual cost = employment cost + acquisition cost + ramp-up cost + ongoing support cost
Then ask what productive output the role needs to generate to justify that commitment.
For example, if a practice estimates that the complete annual cost of the role is $130,000, the decision should not stop at whether the practice can absorb $130,000.
It should ask:
- How much of the employee’s paid time will become genuinely productive?
- What work will they actually take responsibility for?
- How consistently will that workload exist?
- How much senior-team time will the role require?
- What happens to utilisation when demand falls?
The calculation should also recognise that paid employment time is not the same as productive client-delivery time. Employees have paid leave entitlements, including four weeks of annual leave for full-time and part-time employees under the National Employment Standards, and practices need to account for other non-productive time when assessing the capacity a role will actually provide.
The result is a more useful commercial test:
Will the value of the additional productive capacity justify the total commitment required to create it?
When Permanent Headcount Makes Sense
A permanent accountant can be a strong investment when the practice has sustained demand, a clearly defined role and enough consistent work to keep the position productive.
It becomes a more difficult decision when the need is driven mainly by a temporary spike, seasonal pressure or an uncertain pipeline of work.
The distinction is simple:
If the workload is permanent, permanent capacity may be appropriate.
If the workload is variable, the practice should consider whether it needs permanent headcount or flexible access to additional capacity.
That is not an argument against hiring. It is a reason to match the employment commitment to the pattern of work.
Outsourcing Can Change The Commitment
If a practice needs additional accounting capacity but does not have enough consistent work to justify another permanent role, outsourcing provides another option.
The comparison should not be reduced to salary versus an outsourcing fee. The practice should compare the total commitment involved in each model, including recruitment, onboarding, employment overheads, management time, utilisation and the ability to adjust capacity when workload changes.
For some practices, the advantage is not simply lower cost. It is being able to access additional accounting capacity without making the same permanent employment commitment.
Accounting Gurus provides outsourced accounting support for Australian accounting firms, with flexible models ranging from defined or occasional work through to recurring monthly support and dedicated accountants.
Before You Hire, Calculate The Commitment
Another accountant may be exactly what the practice needs.
But before approving the role, calculate more than the salary. Look at the total cost, expected productive output and consistency of the workload.
If the numbers support a permanent role, hire with confidence.
If they do not, the problem may not be that the practice needs another employee. It may simply need more accounting capacity, with a different cost structure.
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