In facilities, cleaning failures rarely start with a mop. They start with a pricing model.
When a contractor prices work using an incorrect labour model, the contract immediately carries cost pressure. That pressure does not disappear. It simply moves downstream into operational shortcuts: reduced frequencies, rushed tasks, skipped details, understaffed shifts, poor supervision, inadequate training, and high turnover.
You can “manage” the symptoms with more inspections, stronger SLAs, or harsher KPIs, but you will keep getting the same outcome if the underlying cause remains: the job was never priced to be delivered compliantly.
And this is where the market needs a reality check.
A “$5 per hour cheaper” cleaning rate (or any materially undercooked hourly rate) is not a bargain. It is a sign the provider has either:
- not costed Award compliance correctly,
- not funded leave, backfill, or statutory on-costs,
- not funded supervision and mobilisation,
- or intends to recover the gap by cutting service.
Below is a transparent, audit-ready example that shows why.
The real cost of an evening cleaner: Award compliance is not optional
Scenario: Part-Time Evening Cleaner (MA000022)
- Ordinary hours: 20 hours per week
- Annual hours: 1,040
- Base rate (Level 1, evening finishing after 6pm): $33.61/hr
On paper, some people treat $33.61/hr like the “cost.” It is not. It is only the starting wage line before entitlements, backfill, and statutory costs.
Step 1: Permanent leave provisions (the employee cost you must fund)
A permanent employee attracts paid entitlements that must be provisioned:
Annual leave (4 weeks + 17% leave loading)
- 4/52 = 7.692%
- 7.692% × 17% = 1.308%
- Total = 9.00%
- Cost impact = 33.61 × 9.00% = $3.02/hr
Personal leave (12 days)
- 12/260 = 4.615%
- Cost impact = 33.61 × 4.615% = $1.55/hr
Long service leave (13 weeks after 10 years, amortised)
- 13/(10×52) = 2.5%
- Cost impact = 33.61 × 2.5% = $0.84/hr
Subtotal employment cost before relief
- Base rate: 33.61
- Leave provisions: 3.02 + 1.55 + 0.84 = 5.41
- Subtotal: $39.02/hr
Already, the “real” permanent cost is not $33.61. It is $39.02/hr, before you even address backfill coverage.
The hidden cost that breaks cheap contracts: leave backfill relief
Cleaning is a fixed-delivery service. The toilets still need cleaning when the cleaner is on leave. That means you must fund casual backfill at the correct Award rate, including statutory on-costs.
Step 2: Casual relief (Award correct rate + statutory on-costs)
- Casual evening rate: $36.19/hr
- On-costs:
- Superannuation: 12%
- Payroll tax: 4.85%
- WorkCover: 4.92%
- Combined multiplier: 1.12 × 1.0485 × 1.0492 = 1.2321
- Fully loaded casual rate: 36.19 × 1.2321 = $44.59/hr
Step 3: Annualised relief loading (spread across 1,040 hours)
Annual leave relief
- 4 weeks × 20 hrs = 80 hrs
- 80 × 44.59 = 3,567.20
- 3,567.20 / 1,040 = $3.43/hr
Sick leave relief
- 12 days × 4 hrs/day = 48 hrs
- 48 × 44.59 = 2,140.32
- 2,140.32 / 1,040 = $2.06/hr
LSL relief (amortised over 10 years)
- 13 weeks × 20 hrs = 260 hrs
- 260 × 44.59 = 11,593.40
- /10 years = 1,159.34 per year
- 1,159.34 / 1,040 = $1.12/hr
Total relief loading = 3.43 + 2.06 + 1.12 = $6.61/hr
Now your compliant employment cost becomes:
- 39.02 + 6.61 = $45.63/hr
Statutory on-costs: order matters (and the maths must be defensible)
Correct legislative order (as a practical costing method):
- Calculate Super first
- Apply Payroll Tax and WorkCover to wages + super (not compounded on each other)
Let A = 45.63
- Super (12%) = 45.63 × 0.12 = $5.48
- Subtotal wages + super = 45.63 + 5.48 = $51.11
- Payroll tax (4.85%) = 51.11 × 0.0485 = $2.48
- WorkCover (4.92%) = 51.11 × 0.0492 = $2.51
Total statutory = 5.48 + 2.48 + 2.51 = $10.47/hr
Fully loaded compliant hourly employment cost (evening, 20 hrs/week)
45.63 + 10.47 = $56.10/hr
That is the point: if someone is quoting materially below this, they are not “efficient,” they are underfunded.
Full-time example: the same pattern repeats
A full-time Level 1 cleaner (36 hrs/week) also lands well above the base Award rate once you fund leave, relief, and statutory on-costs correctly.
Using the same compliant method, the fully loaded outcome you calculated is:
- $44.16/hr (full-time Level 1, MA000022, compliant and annualised)
Different roster. Same reality: base wage is not the employment cost.
“Labour cost” is not the whole cost: operational overheads still exist
Even if you perfectly cost wages, a cleaning contract still requires systems, mobilisation, supervision, uniforms, training, and site-specific equipment.
Using your inputs and a typical 20 hours/week site (1,040 hrs/year), here is a defensible overhead allocation per hour:
Operational overhead assumptions (per 20 hr/week site):
- Start-up kit: $2,000 amortised over 3 years
- 2,000/3 = 666.67 per year
- 666.67/1,040 = $0.64/hr
- Lighthouse licence: $480 per annum
- 480/1,040 = $0.46/hr
- Client Service Manager: $180,000 per annum across 45 sites
- 180,000/45 = 4,000 per site per year
- 4,000/1,040 = $3.85/hr
- Mobilisation and go-live: $90,000 amortised over 3 years, allocated across 45 sites
- 90,000/3 = 30,000 per year
- 30,000/45 = 666.67 per site per year
- 666.67/1,040 = $0.64/hr
- Uniforms: $150 per employee per year (assume 1 employee on the site)
- 150/1,040 = $0.14/hr
- Training: 4 hours induction (amortised over 3 years)
- If paid at the compliant employment cost (evening example $56.10): 4 × 56.10 = 224.40 once-off
- 224.40/3 = 74.80 per year
- 74.80/1,040 = $0.07/hr
Indicative operational overhead total:
0.64 + 0.46 + 3.85 + 0.64 + 0.14 + 0.07 = $5.80/hr
So a realistic, sustainable charge-out starting point (before profit, consumables margin, QA audits, and contingency) is:
- Evening cleaner employment cost: $56.10/hr
- Plus operational overhead: $5.80/hr
- Subtotal (before margin and consumables): $61.90/hr
If a proposal is coming in at “$5 cheaper per hour” (or more), ask the obvious question:
Which part of compliance and delivery has been removed to make the maths work?
What facilities teams should do differently
If you want to stop living in reactive mode (complaints, re-cleans, churn, escalation), stop treating cleaning as a commodity and start validating pricing models at award-cost level.
A practical checklist:
- Request a pricing methodology that shows leave provisions, relief annualisation, and statutory on-cost order.
- Confirm backfill assumptions: annual leave, sick leave, and LSL funding.
- Confirm supervision ratios and account management coverage.
- Confirm mobilisation funding (site set-up, induction, SOPs, chemical registers, SWMS, site-specific risk controls).
- Confirm technology and proof-of-service costs are included, not “optional extras.”
Because once the contract is underpriced, you can’t KPI your way out of a structural deficit. You only get shortcuts.
Closing position
Incorrect pricing models do not create savings. They create unfunded obligations, and unfunded obligations always surface later as service failures, disputes, staff churn, and reputational damage.
If you want consistent presentation, compliant delivery, and defensible service levels, the solution is not to manage the symptoms harder. It is to price the cause correctly from day one.
If you want, I can convert the overhead section into a simple “per-site charge-out build-up” block (labour + overhead + margin + consumables) that you can paste straight into proposals and tender submissions.