How Much Do Recruitment Agencies Charge?
How much do recruitment agencies charge depends on the service: permanent placement is usually a percentage of the candidate's first-year salary, while temporary and labour hire work is billed as an hourly charge rate above the worker's pay. Because no national fee schedule exists, every figure below is indicative, so get written quotes before you sign.
The charge rate must still cover the worker's award wage, super and other on-costs. Use the Fair Work Ombudsman pay guide to check the pay side of any quote.
How much do recruitment agencies charge: rates and rules
The table shows the main fee models and what drives each one. Dollar and percentage figures are not set by law, so ask each agency for its rate card in writing.
| Fee model | How it is charged | What to check |
|---|---|---|
| Permanent placement | A percentage of the first-year salary, commonly 15% to 25% (indicative — get quotes), paid once the candidate starts | Replacement guarantee period and refund terms |
| Temporary or casual labour hire | An hourly charge rate that sits above the worker's pay rate | What the mark-up covers: wages, super, insurance, payroll tax |
| Contract placement | A weekly or hourly rate for a fixed term, with the agency employing the worker | Notice to end the contract early |
| Temp-to-perm conversion | A reduced fee or a sliding scale if you hire the worker directly after a trial period | The conversion period written in the agreement |
| Retained search | A staged fee, paid in part before a shortlist is delivered (indicative — get quotes) | Milestones for each payment |
| Outsourced recruitment (RPO) | A monthly fee or a per-hire fee agreed for the contract | Volume commitments and reporting |
| Pay floor for award-free casuals | At least $33.05 per hour from 1 July 2026, including the 25% casual loading | Fair Work Ombudsman minimum wage page |
A recruiter quoting by phone on a busy Monday may leave out the guarantee terms, so ask for the full rate card before you agree to anything.
What is included in recruitment agency fees for labour hire
A labour hire charge rate bundles several costs into one hourly figure. This is why the rate looks high next to the worker's pay.
| Cost inside the charge rate | What it pays for | Figure to confirm |
|---|---|---|
| Base wage | The worker's pay under the award or agreement for the classification | Fair Work Ombudsman pay guide |
| Casual loading | 25% on top of the base rate under most awards, paid in place of paid leave | Pay guide, casual section |
| Superannuation | 12% of ordinary time earnings for 2026-27, paid with wages under payday super | ATO super guarantee rate |
| Workers compensation | Premiums the agency pays as the employer (icare in NSW) | The agency's policy |
| Payroll tax | NSW charges 5.45% of taxable wages above the $1,200,000 annual threshold for 2026-27 | Revenue NSW |
| Agency margin | Sourcing, screening, inductions, payroll admin and the agency's profit | Ask for the margin to be shown |
A site crew rostered across two projects in the same week can mean extra payroll and travel admin, so ask whether those costs are in the rate or billed on top.
Recruitment agency fees for employers and workers
The fee depends on who pays and what you hire for. Workers should not pay to be placed in a job, so check the arrangement before you sign anything.
| Situation | Who pays and how | Key check |
|---|---|---|
| Small business hiring one permanent role | The employer pays a placement fee once the candidate starts | Guarantee period if the hire leaves early |
| Larger employer with regular casual demand | The employer pays a charge rate per hour worked | Whether the rate falls as hours rise |
| Employer needing a short-term fill | The employer pays the charge rate for the hours actually worked | Minimum shift length and cancellation terms |
| Employer in a licensing state | Same fees, but the provider must hold a licence in Victoria, Queensland, South Australia or the ACT | Current licence number on the agency's paperwork |
| Worker placed by an agency | The agency employs and pays the worker, with no fee taken from their wages for the placement | The payslip, delivered within 1 working day of payday |
How to compare recruitment agency quotes
Put every quote on the same basis before you compare. A low hourly rate with weak guarantees can cost more than a higher rate with clear terms.
- Ask each agency for its rate card in writing, covering placement percentages, charge rates and any admin or onboarding fees.
- Check the worker's pay rate in the Fair Work Ombudsman pay guide for the award and classification, so you know the agency is not underpaying.
- Confirm that the quote includes super at 12% of ordinary time earnings and workers compensation cover.
- Compare guarantee periods, replacement terms and any refund if a permanent hire leaves early.
- Check conversion terms, so you know the cost of hiring a temp directly after a trial.
- Ask for the total expected spend over the period, not only the hourly figure, then choose on value.
Worked example of the pay floor: an award-free casual on the national minimum wage earns at least $26.44 per hour from 1 July 2026, which becomes $33.05 with the 25% loading. A charge rate has to sit well above that figure to be realistic.
Employer obligations when you use an agency
Paying an agency does not remove your duties. A host employer shares responsibility for safety on site, and this checklist covers the main points.
- Confirm in writing who pays the worker, who holds workers compensation cover, and who runs the induction before the first shift.
- Share the same WHS information with agency workers as with your own staff, because host employers and providers share safety duties.
- Check the provider's licence if you hire in Victoria, Queensland, South Australia or the ACT, since NSW has no labour hire licensing scheme.
- Sign off timesheets promptly and accurately, so the agency can pay the worker and issue a payslip within 1 working day of payday.
- Keep copies of the agreement and invoices, because time and wage records must be held for 7 years.
- Be aware that the Fair Work Commission can make regulated labour hire arrangement orders requiring the same pay for the same job in some cases.
A supervisor who signs timesheets late on a Friday afternoon is a common reason an agency worker is paid late.
Worker rights and what to do if you are underpaid by an agency
Agency workers have the same minimum entitlements as other employees. If your pay looks wrong, act early.
- Compare your payslip to the Fair Work Ombudsman pay guide for your award, classification and employment type.
- Write down the dates, hours and amounts that look wrong, and keep your roster and messages as evidence.
- Raise the issue in writing with the agency, because it is your employer, and ask for a reply by a set date.
- If it is not fixed, contact the Fair Work Ombudsman on 13 13 94 for free help.
- Keep every payslip, since employers must hold records for 7 years.
Common mistakes to avoid when you ask how much do recruitment agencies charge
- Comparing only the headline percentage or hourly rate and ignoring guarantee periods, which can leave you paying twice for the same role.
- Assuming a low charge rate is a bargain, when it may not cover the award wage, super or workers compensation.
- Skipping the written agreement, so terms such as conversion fees and notice only appear on the first invoice.
- Forgetting that award rates rose 4.75% from 1 July 2026, which can lift the charge rate on older quotes.
- Treating a worker as a contractor to avoid on-costs, which can be illegal sham contracting if the real arrangement is employment.
- Assuming every state is the same, when licensing rules differ between NSW and states with a labour hire scheme.
Recruitment agency fees FAQ
How much do recruitment agencies charge for permanent staff?
Permanent placement is usually a percentage of the candidate's first-year salary, paid once they start. Rates vary by role and agency, so treat any figure as indicative and get written quotes. Ask about the guarantee period and what happens if the hire leaves early.
How is the hourly charge for temporary workers set?
The agency adds its costs and margin to the worker's pay. Those costs include the award wage, casual loading, super at 12% of ordinary time earnings, workers compensation and payroll tax. Ask for the mark-up to be shown, so you can see what you are paying for.
Do workers pay a fee to an agency?
An agency placing you as its employee should pay you wages through payroll, not charge you to start. Check your payslip, which must arrive within 1 working day of payday. If money is taken from your pay without a clear reason, contact the Fair Work Ombudsman on 13 13 94.
Is labour hire licensed in NSW?
NSW has no labour hire licensing scheme, according to the NSW Government in May 2026, and is working with other jurisdictions on a nationally consistent approach. Victoria, Queensland, South Australia and the ACT do license providers, so check the licence if you hire there.
Getting recruitment agency fees right
This is general information, not legal, tax or financial advice, so check the Fair Work Ombudsman, the ATO or an employment lawyer for your situation. For the bigger picture, read our guide to how recruitment agencies work.
If you are a host employer who wants a clear, itemised charge rate, we can help. Visit our host employer labour hire page to talk to us.