DISCLAIMER: While the principles in this article are valuable for all businesses, this guide is written specifically for NDIS Support Provider businesses delivering core supports. The examples are general only and may not be relevant to your specific circumstances.

Righto, now I have got that off my chest lets answer the question: What is the true cost of hiring employees for your NDIS business.

At the time of writing, the short and semi-useful (but not really) answer is a base rate of $43.23 according to the SCHADS Award (Level 2.1 Social and Community Services Employee – Casual).

If you couldn’t care less about cashflow, love ongoing disputes with fair work and angry letters from the ATO, then I’m shocked you’re even here and I recommend reading no further. However if you’re serious about running a successful business with happy employees supporting happy participants, read on. In reality there is so much more to consider!

 To keep things simple, we will break the costs down into 3 categories.

• Direct cost.
• Indirect costs.
• Surprise (not the fun type) costs.

Before we proceed, you need to familiarise yourself with these two documents: The SCHADS Award, and the NDIS Price Guide. You can think of these as your sources of truth which your business will structure its budget from.

Note: For this article we use the SCHADS award because it applies to the majority of core supports. Please note this award doesn’t govern all NDIS employee salaries. Its vital you research which award is relevant for your business.

The SCHADS Award is the minimum you need to pay your employees, and the NDIS price guide determines the maximum you’re allowed to charge for your services. The difference is the margin that will cover all other business costs.

To put it into an equation: NDIS Price Guide – The SCHADS Award = Gross Margin.

Direct Costs

These are the non-negotiable, legally required entitlements you must pay your employees.

Because core supports often involve inconsistent hours, cancellations, and variable shifts, casual employment is generally the most practical option.

If you want your casual employees to be working independently, you will need to pay them at level 2 pay point 1, which is $43.23 per hour for a regular weekday shift.

This rate changes depending on the day (Sunday, Saturday, Public Holiday or Weekday) and the time of day (Evening, Night Time, Day Time), so its vital to understand all these variations because they’re not optional.

Casual Employees are also entitled to an additional 12% superannuation on top of their usual hourly rate.

If your casual employees are QLD based, they are also entitled to portable long service leave paid at 1.35% of their wages.

When we include superannuation and portable long service leave. The actual direct hourly cost for our employees is $49 per hour as the bare minimum for a daytime weekday shift.

On top of this, you also need to pay your employees all their relevant allowances. If you want to read more about the direct employment cost requirements according to the SCHADS Award, read our article linked here

The NDIS price guide dictates the maximum amount a provider can charge for (most) core supports is $70.23 per hour. This means as a base line, your margin starts at 30% (refer to the above equation: $49/$70 = 30%). This 30% will be needed to fund all your business expenses including your own wages if you’re a director.

Indirect Costs

These sneaky costs are often the silent assassins of profitability. They’re not obvious like wages and superannuation, but they’re essential in running your business and cannot be overlooked. These are the costs that generally increase as you hire more employees. They’re almost synonymous with your partially fixed (part variable) overheads.

The better you manage these indirect employment costs, the more profitable stable your business will be. This is where your skill and knowledge as a director can make a difference.

Here’s some common examples:

NDIS Training & Professional development – As a provider the responsibility of ensuring your employees are trained in NDIS principles & understanding your companies internal policies.

Software subscriptions – It is very common for NDIS practice management software to charge their services per employee.

Insurances – Workcover is a government insurance payment all employees need to pay annually. The premiums are calculated based on the annual wages paid.

Administration & back-office support – This includes the administrative burden of additional payroll, rostering, timesheets, incident reporting, documentation, onboarding and more!

Payroll tax – This one always surprises new business owners! Once your business hits a certain threshold (which varies by state), you get to experience the joys of payroll tax. Yes that’s right, your business will get taxed for paying your employees a higher wage… its crazy but I swear this is a real thing. Unless you’re a larger provider you won’t have to worry about this one because the annual threshold sits at around 1.25 million.

The soloution key to managing these costs is to have in place systems and software that are scalable and standardised. Plan for these expenses beforehand, get expert advice, do your research, do whatever you gotta do because how well you manage your overheads will ultimately determine how much of that 30% margin you get to keep.

Surprise Costs

When you’re in business, you need to expect the un-expected. By the very definition, no one expects a surprise cost… Otherwise it’d just be a regular cost. These costs can be nearly completely eradicated with proper planning and mitigation.

THEREFORE! The more you understand your business and your employees, the less surprise costs you will have.

Examples include:

Employee Misconduct – In the NDIS, the consequences can be severe. A missed appointment or inappropriate behaviour can cause real harm to participants and damage your reputation.

Changes in Employee Circumstances – Casuals don’t have to accept shifts and don’t have to give notice. Last‑minute cancellations can leave you holding the cost.

Literally anything else – legislative changes, legal fees, team events, bonuses, pay-rises. You could really go forever because you never know what costs might come up, such is the nature of business. 

All we can do is minimise these risks as much as possible by:

1. Having impeccable internal processes.
2. Knowing your business like the back of your hand.
3. Having a sufficient cash reserve to cover the un-expected.

To Summarise

NDIS businesses are service based and the number of employees directly impacts your revenue., therefore your business growth needs to directly correlate with the number of employees you hire.

When deciding to hire:

Direct Costs – You have very little flexibility. 70% of your revenue will directly go to employees.

Indirect Costs – You have lots of flexibility: These expenses will go up as you hire more employees. Your skill and efficiency as a business owner will have a huge impact on your overhead expenses.

Surprise Costs – The more you know, the less surprised you will be. Always keep a cash buffer.