HR manager salary vs outsourced HR: What fits 20-100 staff

You run a 20-to-100 person company and you need HR expertise, but you’re not sure whether to pay a six-figure salary for an in-house manager or to outsource the function. This guide will settle the cost, coverage and risk questions so you can decide the right approach for your business.

HR manager salary vs outsourced HR: What to expect

When you hire an HR manager, the headline figure is the base salary – often quoted as a six-figure amount for a senior professional. On top of that you must add superannuation (12 per cent of salary), payroll tax where applicable, workers’ compensation, leave loading, recruitment agency fees (typically 15-25 per cent of the first-year salary), and the ongoing cost of keeping the role up-to-date with legislation. Outsourced HR, whether fractional or dedicated, is priced as a monthly service fee that already bundles compliance, advice and administration. The key is to compare total cost of ownership, not just the headline salary.

How the total cost of an in-house HR manager adds up

Assume a base salary of $120,000 per year – a realistic figure for a senior HR manager in a midsised firm. Add 12 per cent superannuation ($14,400) and you’re at $134,400. Recruitment agencies charge between 15 and 25 per cent of that salary, so budget $18,000 to $30,000 in the first year. Annual leave loading (usually 17.5 per cent of base salary) adds another $21,000. You also need to factor in payroll tax (if your annual payroll exceeds the state threshold) and workers’ compensation premiums, which vary by state but can be a few thousand dollars. The result is a total outlay well above $180,000 in the first year, rising each year as super and leave loading continue. For a small business owner, the practical step is to map each line item in a spreadsheet and compare it against your cash-flow capacity.

What fractional HR from ACTIv8 actually costs

ACTIv8 offers fractional HR support from $5,000 a month ex GST. That fee includes a senior HR professional working part-time across your business, handling compliance, policy development and employee queries. The monthly price already covers superannuation for the ACTIv8 staff, and there are no hidden recruitment fees because the service is subscription-based. Over a year the cost is $60,000 plus GST, which is roughly one third of the total first-year cost of an in-house manager. Because the service is billed monthly with a 30-day notice period, you can scale up or down as your business grows. To understand the exact fit for your company, read how ACTIv8 works and model the monthly expense against your budget.

Dedicated outsourced HR versus a full-time hire

If you need a full-time presence but prefer not to employ directly, ACTIv8 provides a dedicated HR professional for $9,000 a month ex GST. This model mirrors the hours of an in-house manager but removes the overhead of super, recruitment agency fees and leave loading. The annual cost is $108,000 plus GST, still lower than the $180,000+ you would spend on an employee when all add-ons are counted. The dedicated model also includes coverage for the right-to-disconnect rules that apply to small businesses since August 2025, because the ACTIv8 team works AEST hours and respects Australian employment standards. Compare the two by reviewing plans and pricing and checking whether you need the extra flexibility of a fractional arrangement or the consistency of a dedicated professional.

Risk, coverage and leave gaps – who protects you

With an in-house manager, you bear the risk of unintentional underpayment – a criminal offence since 1 January 2025 – and you must stay on top of the national minimum wage increase (now $26.44 per hour). You also need to manage the right-to-disconnect obligations and ensure any leave taken is covered by a backup resource. Outsourced HR removes much of that risk: ACTIv8’s team stays current with award rates, super guarantee and compliance deadlines, and they provide continuity when your staff are on leave. Below is a quick checklist for owners:

• Confirm the total cost of an in-house hire, including super, leave loading and recruitment fees.
• Map the monthly fee of fractional or dedicated outsourced HR against cash flow.
• Check that the outsourced provider covers compliance with the 2026 minimum wage and right-to-disconnect rules.
• Assess the risk of underpayment penalties versus the built-in compliance of a subscription service.
• Consider flexibility – can you scale the outsourced service as your headcount moves from 20 to 100?

Questions we hear about this

Is the monthly fee cheaper than a salary? In most cases the $5,000-$9,000 per month subscription works out to less than the total first-year cost of an employee once super, recruitment and leave loading are added.

What happens if I need more hours? You can upgrade from fractional to a dedicated professional with a simple plan change; ACTIv8’s 30-day notice period makes the transition smooth.

Do I still need to pay super for the outsourced staff? No – the monthly fee includes all employment costs for the ACTIv8 team, so you only pay GST on the subscription.

Not sure what this means for your business? Book a 20 minute call with ACTIv8. Straight answers, no hard sell, and if you do not need us we will say so.