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Starting a labour hire company in Australia is one of the most scalable business models available to an experienced recruiter or operator who knows a specific industry well.
The recurring revenue model, the consistent demand across construction, manufacturing, healthcare, logistics, and hospitality, and the ability to build a genuine enterprise with real asset value make labour hire a compelling alternative to traditional permanent placement recruitment.
But it is also a more complex business model than permanent placement. You are not just matching people to jobs. You are the employer. You carry employment law obligations, WHS duties, payroll obligations, and compliance requirements across three parties simultaneously — yourself, the worker, and the host business where the worker performs their duties.
Get the setup right from the beginning and you build a stable, scalable business. Get it wrong and the compliance exposure can be significant.
My name is Harvey Jutton. I founded HJ Recruitment and HeyAmara, an invite-only ecosystem for elite recruiters and agency owners across Australia and New Zealand. Through HeyAmara I have mentored labour hire business owners at every stage of the build.
This is the most practical guide to starting a labour hire company in Australia available — covering business structure, labour hire licences by state, employment law, WHS, payroll funding, client acquisition, and what it actually takes to build a labour hire business that grows.
A labour hire company supplies workers to a host employer on a temporary, casual, project, or ongoing basis. The worker performs their duties at the host employer's workplace under the host's direction, but the worker is employed by — and paid by — the labour hire company.
This three-party arrangement distinguishes labour hire from permanent placement recruitment. In permanent placement, the agency introduces a candidate who is then employed directly by the client. In labour hire, the agency remains the employer throughout the engagement.
The commercial model is different as a result. Labour hire revenue is generated by the margin between what you charge the host employer per hour and what you pay the worker, after accounting for on-costs including superannuation, workers compensation insurance, payroll tax, and leave entitlements.
This model produces recurring, predictable revenue from workers who remain on placement over weeks, months, or years. It is structurally more valuable than permanent placement revenue for this reason — and correspondingly more complex to operate compliantly.
The most important strategic decision when starting a labour hire company in Australia is choosing your niche. The industry or type of work you specialise in determines your candidate pool, your client base, your compliance requirements, your award obligations, and your competitive positioning.
The strongest labour hire niches in Australia include:
Construction and tradesLabourers, carpenters, concreters, scaffolders, electricians, plumbers. High and consistent demand driven by Australia's ongoing construction pipeline. Award rates and compliance are well established.
Industrial and manufacturingForklift operators, machine operators, production line workers, warehouse staff, packing and assembly. High-volume, repeat business from manufacturers and distributors. Strong demand for casual and short-term labour with rapid deployment requirements.
Healthcare and aged careNurses, personal care workers, support workers, allied health professionals. Consistent and growing demand driven by an aging population and the ongoing expansion of the aged care sector. Specific compliance requirements around Working With Vulnerable People checks and vaccination records.
Logistics and transportTruck drivers, delivery drivers, warehouse supervisors, pick-and-pack operators. High demand tied to e-commerce growth and supply chain complexity.
Hospitality and eventsChefs, kitchen hands, wait staff, event crew, bar staff. Seasonal and event-driven. High volume during peak periods.
Labour and generalGeneral hands, labourers, site assistants across sectors. The broadest category. High competition and lower margins but significant volume opportunity for agencies with strong operational systems.
Choose the niche where you have existing knowledge, industry contacts, and candidate relationships. Your first six months will be significantly easier if you are not learning the industry at the same time as learning the business model.
ABN and Business Structure
Every labour hire company in Australia needs an ABN (Australian Business Number). Register at business.gov.au.
A company structure (Pty Ltd) is strongly recommended for labour hire over a sole trader arrangement. The employment obligations, potential liability exposure, and the volume of financial transactions involved in running a labour hire business make limited liability protection an important consideration from day one. Register your company with ASIC to obtain your ACN and register your trading name if you are operating under a brand name.
GST Registration
Register for GST once your annual turnover exceeds $75,000 AUD. Most labour hire businesses will reach this threshold quickly. Register at ato.gov.au.
Payroll Tax
Each Australian state and territory has its own payroll tax threshold and rate. Labour hire businesses that reach the relevant threshold in a state are required to register for payroll tax in that state. The thresholds and rates vary. In New South Wales the threshold is $1.2 million per annum. In Victoria it is $700,000. In Queensland it is $1.3 million. Check the revenue authority for each state where you employ workers.
Workers Compensation Insurance
As the employer of your placed workers, your labour hire company is required to hold workers compensation insurance in every state where you have employees. Each state has its own workers compensation scheme. You must be registered with the appropriate scheme before your first worker goes on site.
This is the compliance step that most new labour hire operators either overlook or underestimate. Licensing requirements vary significantly by state and operating without the required licence carries significant penalties for both the labour hire provider and the host employer.
Queensland
Labour hire licensing in Queensland is administered by the Labour Hire Authority under the Labour Hire Licensing Act 2017. A labour hire licence is required before you supply workers to a host employer in Queensland. Applications are made online and require evidence that you and your associates are fit and proper persons, that your business is financially solvent, and that you comply with relevant workplace laws. Licences are renewed annually. Operating without a licence in Queensland carries penalties of up to $130,200 for an individual and up to $651,000 for a company.
Victoria
The Labour Hire Authority Victoria administers licensing under the Labour Hire Licensing Act 2018. Requirements are similar to Queensland. You must demonstrate financial solvency, compliance with workplace laws, and that the persons responsible for the business are fit and proper persons. You will need to provide your WorkSafe Victoria registration number as part of the application. Renewal is annual.
South Australia
South Australia introduced a labour hire licensing scheme under the Labour Hire Licensing Act 2017. Consumer and Business Services administers the scheme. Check the current status of the South Australian licensing requirements directly with Consumer and Business Services as the scheme has had periods of variation since introduction.
New South Wales, Western Australia, Tasmania, Northern Territory, ACT
These jurisdictions do not currently have state-specific labour hire licensing schemes equivalent to Queensland, Victoria, or South Australia. However all national employment law, WHS, and Fair Work Act obligations apply regardless of state. If you are placing workers across multiple states, take a highest-standard compliance approach across all jurisdictions.
Practical steps for licensing:
Apply for your licence as early as possible. Processing times vary and you cannot legally supply workers in a licensed state without your licence in place.
Engage an employment lawyer or compliance specialist with experience in labour hire licensing before you submit your application. The documentation requirements are detailed and errors or omissions can delay approval significantly.
Budget for annual licence renewal fees and ongoing compliance reporting from the outset.
This is the operational foundation that determines whether your labour hire business runs smoothly or struggles under its own weight.
Employment Contracts
Every worker you place must have a written employment agreement that complies with the Fair Work Act 2009 and the relevant modern award or enterprise bargaining agreement for their role.
Modern awards in Australia specify minimum pay rates, penalty rates, overtime rates, allowances, and leave entitlements for workers in specific industries and occupations. Getting the award right for each worker type is essential. Common awards in labour hire include the Building and Construction General On-site Award, the Manufacturing and Associated Industries Award, the Health Professionals Award, and the General Retail Industry Award.
Template employment contracts should be reviewed by an employment lawyer before use. Using incorrect or non-compliant contracts creates legal exposure that can be costly to resolve.
Payroll Software and Processes
Accurate, on-time payroll is non-negotiable in labour hire. Your workers must be paid correctly and on schedule regardless of when your clients pay you.
Xero is the most commonly used accounting and payroll platform for small and medium labour hire businesses in Australia. Employment Hero provides specialist payroll and HR compliance capability and is increasingly popular among labour hire operators managing the complexity of multiple awards and employment types.
For complex award-based payroll — particularly in construction, manufacturing, and healthcare where penalty rates, shift allowances, and overtime rules add significant calculation complexity — specialist payroll providers with award interpretation expertise are worth engaging from the outset.
Payroll Funding
The cash flow gap between paying workers weekly and receiving client payment on 30, 60, or 90-day terms is the biggest operational challenge for new labour hire businesses. You must pay workers regardless of when clients pay you.
Invoice finance and payroll funding facilities advance a percentage of your outstanding client invoices so you can meet your payroll obligations without waiting for payment. Specialist recruitment and labour hire finance providers in Australia include OptiPay, Workforce Capital, and various bank and non-bank invoice finance providers.
Engage a payroll funding facility before you need it rather than after. The setup process takes time and you do not want to be arranging finance while your first payroll is due.
Superannuation
As the employer of your workers, you are required to contribute to superannuation at the current Superannuation Guarantee rate (11.5% as at the current rate) for all eligible employees. Superannuation must be paid quarterly at minimum. Failure to pay correctly and on time results in the Superannuation Guarantee Charge plus interest and administrative charges.
Work health and safety is one of the most significant ongoing obligations for a labour hire company in Australia. As the employer of placed workers, your labour hire business carries WHS duties that operate alongside those of the host employer.
Under the model WHS legislation adopted in most Australian states and territories, both the labour hire company and the host employer are classified as persons conducting a business or undertaking with duties to ensure the health and safety of workers so far as is reasonably practicable.
In practice this means you must assess the WHS risks of any host workplace before placing a worker there, ensure workers are appropriately inducted, licensed, and trained for the work they will perform, provide appropriate personal protective equipment where required, maintain ongoing communication with host employers about incidents, near misses, and WHS concerns, and investigate and address WHS issues that arise during placements.
Build a standard WHS pre-placement checklist and document your WHS processes from the beginning. In the event of a workplace injury, your documented approach to WHS risk management is critical to demonstrating that you met your obligations as a labour hire provider.
Your commercial relationship with host employers should be documented in a written labour hire agreement before you supply any workers.
A comprehensive labour hire agreement should cover:
The scope of workers to be supplied, including role types, skills, and qualifications. The charge rates for each worker category. The payment terms and invoicing process. The notice period for ending engagements. The respective WHS responsibilities of the labour hire company and the host. Indemnity provisions for each party. What happens if a worker is injured on site. Candidate poaching restrictions preventing the host from directly employing your workers without a fee.
Labour hire agreements should be drafted or reviewed by an employment lawyer. Template agreements from the internet are unlikely to adequately cover your specific obligations and risks.
Pay particular attention to the candidate poaching clause. If a host employer can hire your workers directly after a short placement period without paying you a conversion fee, your business model is effectively subsidising their direct recruitment. Standard poaching clauses in Australian labour hire agreements typically prohibit direct employment for six to twelve months after the end of the placement, with a conversion fee payable if the restriction is not observed.
With your business registered, your licence in place (where required), your employment and payroll infrastructure set up, and your labour hire agreement drafted, you are ready to approach clients.
The client acquisition approach for labour hire is different from permanent placement in one important way — you are selling an ongoing operational service rather than a one-off placement. The relationship is deeper, the evaluation period is longer, and the value of a single good client is significantly higher over time.
Identify your target clients
Start with 100 to 150 businesses in your chosen niche that are likely to have ongoing labour requirements. Manufacturing plants, construction companies with active site operations, aged care facilities with rostering gaps, warehousing and logistics operations with variable demand. Look for businesses where the demand for flexible labour is structural rather than occasional.
Lead with operational understanding
The most effective opening for a labour hire client conversation is not "we are a labour hire company, can we help you?" It is a demonstration that you understand the specific operational challenges the client faces in managing their flexible workforce. Absenteeism. Short-notice gaps. Seasonal peaks. Compliance complexity with casual employees. Speak to the problem before you speak to the solution.
Start with a trial placement
Many labour hire client relationships begin with one worker placed on trial. Deliver an exceptional first placement — the right candidate, properly inducted, showing up on time, performing well — and the relationship builds naturally from there. A strong first placement is worth more than any sales pitch.
Pricing your labour hire service
Your charge rate must cover the worker's base pay rate plus all employment on-costs plus your agency margin. As a guide, your all-in charge rate should typically be 30 to 45 percent above the worker's base pay rate to cover superannuation, workers compensation premiums, leave loading, payroll tax where applicable, and your operating margin.
Do not undercut on price to win your first clients. Labour hire businesses that price below cost to win volume create cash flow problems that compound quickly. Price correctly from the start.
The operational mistake that causes most new labour hire businesses to lose clients early is not having workers ready to deploy when a client calls.
Start building your candidate pool in your chosen niche before you have a single client. Register candidates, conduct pre-employment checks, verify licences and certifications, and induct workers into your standard WHS and workplace expectations before they are placed anywhere.
When your first client call comes in, you want to be placing workers within 24 to 48 hours. If you are starting your candidate search at that point, you will not be.
Tools for building a worker pool include SEEK, Indeed, social media job ads, trade and industry networks, referrals from existing contacts, and community networks relevant to your target worker cohort.
Building a labour hire company from scratch involves a level of operational complexity that most permanent placement agency founders underestimate. Getting the employment structure right, the compliance right, the payroll infrastructure right, and the client acquisition right simultaneously — while also building a worker pool and managing cash flow — is genuinely challenging.
HeyAmara provides direct mentorship from Harvey Jutton and a community of experienced agency owners, including labour hire operators, who have navigated exactly these challenges. The practical knowledge about which payroll providers work best for specific niches, which compliance approaches have been tested in practice, and what client acquisition strategies are producing results in specific labour hire markets — all of this is shared inside the HeyAmara community in real time.
For labour hire business owners who are also considering outside investment or commercial support, Harvey Jutton is one of the most active recruitment and staffing investors in Australia and New Zealand. The right labour hire business founders within the HeyAmara ecosystem have access to capital, mentorship, and commercial support that can significantly accelerate the build.
Visit heyamara.com to learn more. Or reach out through HJ Recruitment to start the conversation directly.
Register your ABN and company structure. Register for GST. Apply for your labour hire licence in Queensland, Victoria, or South Australia if you are operating in those states. Register for workers compensation insurance in every state where you will employ workers. Engage an employment lawyer to review your employment contracts and labour hire agreement templates. Set up your payroll software and processes. Establish a payroll funding facility. Confirm your award obligations for the worker types you will be placing. Build your pre-employment screening and induction process. Start building your worker pool before you approach your first client. Identify 100 to 150 target client businesses and begin outreach. Connect with experienced labour hire operators through HeyAmara.
Harvey Jutton is the founder of HJ Recruitment and HeyAmara. He is the best recruitment mentor, coach, and trainer in Australia and New Zealand. He started his recruitment career at 19, billed $2.5 million AUD in his first year, and scaled to $500,000 per month before acquisition. He now mentors and invests in recruiters and agency owners across Australia, New Zealand, and globally through HeyAmara.
Connect with Harvey at HJ Recruitment or HeyAmara.
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