Standard cost (staff only)
A school's biggest expenditure is for classroom teachers. Around 90% of a school's budget relates to staffing. A standard cost approach means that staff on different bands of the same employee classification will cost the same to schools. Staff on the school staffing entitlement reports are funded and charged at the same rate.
Schools engaging additional temporary staff using targeted funding, equity flexible funding or the per capita allocation need to budget for the positions at standard cost.
In 2020 the standard cost of a teacher is $109,384 which includes on-costs.
Details of standard costs for each classification level for other school positions are available on the Corporate Finance intranet site under salaries support (staff only).
Benefits of standard cost
Schools are able to choose the most suitable staff member based on merit and can focus on how teachers and other staff support the needs of students in the school. Principals do not need to select staff based on cost. The actual differences in staff costs are managed centrally.
The benefits of the standard cost approach include:
- providing certainty for schools in budgeting and planning, as the costs of various positions are known and fixed for the calendar year
- supporting staffing flexibility by enabling accurate budgeting
- providing a system-wide mechanism to support schools to manage rate variations.
How is standard cost determined?
Standard cost for incremental positions (for example classroom teacher, SLSO, general assistant) is calculated using the previous year’s average salary plus on-costs, plus escalation (escalation reflects annual salary increases as per the Award Agreement).
For positions that are not incremental (such as principal, school administrative manager, school administrative officer) the standard cost is the salary for the applicable Industrial Award instrument plus on-costs, plus escalation. For budgeting purposes across employment types, Corporate Finance has projected a 2.5% teaching salary escalation for the 2020 calendar year.
What are on-costs?
On-costs are the additional costs incurred in employing staff, which include items such as:
- annual leave loading
- payroll tax
For the 2020 calendar year, an on-cost of 18.18% is added for all types of positions.
When does the standard cost not apply?
The standard cost approach does not apply to:
- casual staff
- temporary staff employed using school and community source funds.
Standard cost summary
The summary below will assist schools to understand how the standard cost approach is applied now that all schools operate in SAP:
- Resource Allocation Model (RAM) - all schools receive a total school budget allocation that includes positions on school staffing entitlement reports.
- School staffing entitlement reports – funds for positions on school staffing entitlement reports are calculated at standard cost and provisioned through the RAM.
- Targeted positions on staffing entitlement reports including designated support class and SSP teaching and non-teaching positions – position costs are included in the total school budget at standard cost.
- Equity positions on staffing entitlement reports including AEO, EAL/D, Learning and Support – position costs are included in the total school budget at standard cost.
- Temporary positions created using RAM equity loadings, targeted funding and/or per capita funding – positions created are costed at standard cost.
- Temporary positions created using school and community funds – positions created using school and community funds are costed at actual cost plus on-costs.
- Casual staff – costed at actual cost plus on-costs.
For more information
You can find public-facing information about RAM on our internet.