A global survey on taxation has highlighted the burden Australia’s state and federal taxes, compulsory superannuation contributions and workers’ compensation insurance are having on local employers.

The research by business consultant Grant Thornton has found Australia is becoming an unattractive option for foreign investors because of its company tax rate and employment-related charges.

The report finds 78% of privately held businesses from 36 countries identify taxation as a significant factor in deciding the location for an operating base outside their own country.

Grant Thornton Australia’s Head of Tax Peter Godber says the cost of employing people is just too high in Australia.

“Between the mix of federal tax on fringe benefits, compulsory superannuation contributions, state payroll taxes and workers’ compensation insurance, there are some hefty on-costs that employers have to deal with annually,” he said.

“We need to get better alignment between federal and state imposts because as overseas companies more closely scrutinise our tax system, they will no doubt see the serious financial impact that being an employer in this country has on the bottom line.”

Mr Godber says the Henry Tax Review provides an opportunity to “get our house in order” and “get it right”.