Career Tool
Total Exit Cost
$10,905
Estimated financial impact of your resignation
Your total cost of quitting is estimated at $10,905. The largest factor is your 2-week gap between jobs, costing you $4,219 in gross salary and $485 in lost superannuation contributions. Forfeiting a $5,000 bonus significantly increases your exit cost. Consider if waiting for the payout date is viable. While there is a cost to the transition, it seems manageable within the context of a career move.
The 'Cost of Quitting' refers to the total financial impact of resigning from your current employment, extending far beyond just the loss of your regular paycheck. In the Australian economic landscape, quitting a job involves a complex interplay of lost wages, forfeited entitlements, tax implications, and out-of-pocket transition expenses. While most professionals focus on the salary of their next role, few accurately calculate the 'exit cost' of their current one. This includes the 'gap' between paychecks, the loss of pro-rata bonuses, the potential forfeiture of unvested equity or employee share schemes, and even the loss of perks like car allowances or health insurance subsidies. Understanding these costs is crucial for making an informed career decision, ensuring that a move for a slightly higher salary doesn't actually result in a net financial loss in the short term. As the Australian job market remains dynamic, with 'job-hopping' becoming more common, having a clear-eyed view of your resignation's price tag allows you to negotiate better sign-on bonuses or start dates with your new employer, effectively neutralizing the costs of your departure.
Our Cost of Quitting Calculator uses a multi-layered approach to determine the financial impact of your resignation. The core formula begins with 'Lost Income during the Transition Gap', calculated by dividing your annual salary by 52.14 (the ATO standard for weekly conversion) and multiplying by the weeks you expect to be without pay. We then factor in 'Forfeited Variable Pay', which includes any performance bonuses, commissions, or retention payments that you would have been eligible for had you stayed. Importantly, we consider 'Unvested Benefits'—a common trap for Australian employees in tech or corporate sectors where Employee Share Schemes (ESS) or options vest over several years. The calculator also adds 'Direct Transition Costs', such as professional career coaching, new attire, travel for interviews, or relocation expenses not covered by the new employer. In the Australian context, we also remind users to consider the impact on Superannuation; for every week you are unpaid, you lose the 11.5% (FY24/25 rate) Super Guarantee contribution that your employer is legally mandated to pay.
Many Australian professionals don't realize that their new employer may be willing to cover the 'cost of quitting'. If you are forfeiting a significant annual bonus or unvested super contributions by leaving now, bring this data to your negotiation. A 'sign-on bonus' is often specifically designed to 'buy out' the employee from their current financial obligations, making the transition cost-neutral for you.
Check your contract regarding Long Service Leave (LSL). In many Australian states, you become entitled to a pro-rata payout of LSL after 7 or 10 years of service. Quitting just months before hitting a major milestone could cost you thousands of dollars in lost leave payouts. Always review your 'service anniversary' before handing in your notice.
When you take a gap between jobs, your Superannuation contributions stop. Due to the power of compounding interest, a $2,000 gap in contributions at age 30 could result in a $15,000 difference in your final retirement balance. If you're taking an extended break, consider making a personal concessional contribution to bridge the gap and maintain your wealth trajectory.
Identify the exact notice period required and whether 'payment in lieu of notice' is an option. Also, look for clauses regarding the forfeiture of bonuses—some contracts require you to be 'employed and not under notice' on the day a bonus is paid to receive it.
Ensure you have enough cash in a high-interest savings account to cover your lifestyle expenses during the transition weeks. Use our Emergency Fund Calculator to determine if your safety net is robust enough to handle an unexpected delay in your new job's start date.
List all perks that will disappear: gym memberships, car allowances, laptop salary packaging, or discounted health insurance. Research the cost of replacing these items individually so you can factor them into your new salary requirements.
Sarah, a Project Manager in Sydney, resigned in June, just three weeks before her $10,000 annual bonus was due. Because her contract required her to be 'not under notice' to receive the payment, she forfeited the entire amount. Her 'cost of quitting' was nearly $12,000 when accounting for her one-week gap between roles.
Mark left his tech startup role for a corporate position with a 15% higher salary. However, by leaving, he forfeited $40,000 in unvested stock options that were set to vest over the next 18 months. It took him nearly three years in the new role to recover the wealth lost in that single resignation.
Priya was offered a new role but realized quitting would cost her $5,000 in relocation costs and lost training subsidies. She presented a breakdown of these costs to her new employer, who agreed to a $7,000 sign-on bonus to cover the transition, making her move financially seamless.
Everything you need to know about this topic.
Continue your journey with these related resources.