A fractional executive on a $6,000 a month retainer usually costs less than one day a week of a full-time senior hire, once you add superannuation, payroll tax, leave provisions and the recruitment fee nobody mentions in the interview process. Run the full-time numbers properly (illustrative figures below, every business is different) and a $220,000 base salary often lands closer to $370,000 to $410,000 in true year-one cost, before that person has shipped anything. That's the honest starting point for this comparison. It's not \"fractional always wins.\" It's know what you're actually comparing, then pick the model that fits the role.
The Full-Time Number You're Actually Comparing Against
Founders and finance leads almost always compare fractional cost against base salary. That's the wrong comparison. Base salary is maybe 75-80% of what a senior full-time hire actually costs a business in year one. The rest hides in on-costs that don't show up until you're three months into onboarding someone who isn't fully productive yet.
Here's an illustrative worked example for a full-time VP-level hire on a $220,000 base in Australia. Every figure below will move depending on your state, your award, your industry and your recruiter, so treat this as a shape to reason with, not a quote.
Picture a 35-person SaaS business deciding between a full-time Head of Sales on $220,000 base, or a fractional VP Sales two days a week. The founder quotes the recruiter's number to the board as the cost of the hire. It isn't. It's the entry fee.
| Cost component | Illustrative annual figure |
| Base salary | $220,000 |
| Superannuation (12%) | $26,400 |
| Payroll tax (varies by state, ~5% used here) | $11,000 |
| Leave provisions (annual + personal, accrued) | ~$18,000 |
| Bonus/STI (if on target) | $20,000-$30,000 |
| Recruitment fee (15-20% of package, year one only) | $35,000-$45,000 |
| Onboarding ramp (3-6 months at reduced output) | Equivalent of $40,000-$60,000 in lost productivity |
| Illustrative true cost, year one | $370,000-$410,000 |
And that's before you've priced in the risk of it not working out. Get the hire wrong, average candidate, wrong culture fit, wrong stage of business, and you're carrying a notice period, possibly a redundancy payout, and then running the whole search again eight months later. That risk doesn't show up on a spreadsheet until it happens to you.
What a Fractional Retainer Actually Costs
A fractional executive working two days a week typically sits on a retainer of $6,000 to $9,000 a month depending on seniority and scope, so somewhere around $72,000 to $108,000 a year, illustratively. There's no superannuation on top of that (they invoice as a business, not an employee), no payroll tax, no leave provisions, no recruitment fee, and no three-month ramp, because you're engaging someone who has done this exact job at four or five other companies already and knows how to get moving in week one, not month three.
Scale it down to one day a week for a smaller business and you might be looking at $3,000 to $4,500 a month, all in, nothing hidden in a second invoice later. Scale it up if the business needs more of their time. That flexibility is the actual product, not just the day rate.
The Side-by-Side, Illustrative Numbers
The fair comparison isn't role for role, it's capacity for capacity. A full-time hire gives you five days a week of one person's attention. A fractional exec typically gives you one to two days. Here's what that looks like once you normalise for the days actually delivered.
| Full-time (5 days/week) | Fractional (2 days/week) | |
| Illustrative annual cost | $370,000-$410,000 | $72,000-$108,000 |
| Cost per day of capacity | ~$1,450-$1,600/day | ~$700-$1,050/day |
| Time to productive | 3-6 months | Typically weeks, not months |
| Commitment | Ongoing employment, notice period, severance risk | Month to month, scale up or down as needed |
The day rate itself is often cheaper too, not just the total. A fractional operator has usually run the exact function you need at multiple companies in the last two years. They're not learning your industry on your clock, and there's no line management overhead of growing someone into the role. You're paying for judgment that's already current, not judgment you're funding the development of.
When Full-Time Is Actually the Right Call
None of this makes fractional the automatic answer. Full-time is the right call in a few specific situations, and it's worth being honest about them rather than pretending the fractional model fits everywhere.
- The role genuinely needs five days a week of presence, daily fires, a big team to run day to day, constant internal coordination that doesn't pause when the exec isn't in the building.
- The function is core IP or a competitive moat for the business, and you need someone building deep, compounding institutional knowledge over years, not months.
- You've already proven the function is necessary and well-defined. Full-time hiring works best when you know exactly what the role needs to do, not when you're still figuring that out.
If you're still working out whether you need a CFO, a VP Sales, a Head of Marketing at all, hiring full-time to answer that question is an expensive way to find out. That's usually the better use case for fractional or interim first, then convert to full-time once the shape of the role is proven. There's a useful breakdown of how that distinction plays out in practice in fractional vs consultant vs interim.
I've seen both calls made well. A scaleup that had already proven its sales motion and needed someone building a 12-person team and owning the number every single day, that was a full-time hire, and the right one. A pre-revenue founder who thought they needed a $250,000 Head of Sales but actually needed someone to build the first playbook and prove the ICP, that was fractional, and full-time would have burned six months of runway finding out the hard way. Same title, completely different answer.
How to Actually Decide
Ask two questions before you run a full-time search. Does this role genuinely need five days a week of someone's attention right now, and is the function proven enough that you know what you're hiring for. If both answers are yes, full-time is probably right, and the cost table above is what to budget against, not just the base salary a recruiter quotes you.
If either answer is no, if you need senior judgment without the full-time cost and commitment, or you want to test whether the function even earns its keep before you commit to a permanent hire, fractional is built for exactly that gap. It's the same logic whether the seat is commercial or financial. If you're weighing this up for a finance leader specifically, how much does a fractional CFO cost in Australia walks through the same maths with CFO-specific numbers, and what is a fractional CFO covers what the role actually does day to day.
Real talk: the honest answer for most founders sits somewhere in the middle. Start fractional, prove the function matters, then decide if it earns a full-time seat. That's a far cheaper way to find out than a $400,000 bet on a résumé.
If you're a fractional operator working through this exact pitch with prospects, or a founder trying to work out which side of this table you sit on, the Fractional Exec Community is built around exactly these conversations, from people who run this maths for a living.