Payroll oncosts - DRFA

About

Payroll oncosts under Disaster Recovery Funding Arrangements 2018 (DRFA) were previously administered at a state level, however the National Emergency Management Agency (NEMA) now seek national consistency in their application with a national guidance note published in March. 

The DRFA: Labour Costs National Guidance Note was published in March 2026, with changes backdated effective from 1 July 2025. 

Calculation of payroll oncosts under DRFA

This guidance outlines the: 

• methodology for calculation of payroll oncosts under the Disaster Recovery Funding Arrangements 2018 (DRFA)
• eligible payroll oncosts under the DRFA
• documentation required to be maintained.

Date of effect for methodology

This methodology applies to costs incurred by councils and state agencies, in accordance with the definition of state expenditure, effective from 1 July 2025. 

Key changes

The key changes introduced in the national guidelines include a:

• requirement for all councils to undertake annual on cost reviews 
• summary of changes from previous eligibility.

Date for councils to implementing updated calculations

QRA is seeking to have updated calculations for all councils implemented by 1 September 2026.

QRA Assurance team will be proactively reaching out to councils during this time to provide support. 

If a council fails to respond by the implementation date QRA will be required to determine, based on publicly available information, a rate and apply that rate to all submissions processed after 1 September 2026.

NEMA national guidance

Percentage-based costs

The costs that may be included in the calculation of payroll oncosts as a percentage are:

• superannuation
• workers’ compensation
• leave, including:
  • annual leave
  • personal leave (Sick, Domestic Violence etc.)
  • long service leave
  • public holidays.

Direct costs

Direct eligible costs that may be claimed as actual costs can include:

• allowances nominated in contracts or approved enterprise bargaining agreements
• travel allowances and costs
• personal protective equipment (PPE) consumed on the project (not uniforms).

Where a direct eligible cost is incurred that falls outside of the percentage calculation it may be claimed as an actual cost.