How to Start a Temp Agency in Australia: Costs and Licences (2026)

Last updated 10 July 2026.

To start a temp agency in Australia you register a company, hold a labour hire licence in each state that requires one (Victoria, Queensland, South Australia and the ACT; NSW and WA have no scheme), and become the legal employer of your temps: weekly wages, 12 per cent super, WorkCover and the award sit with you. The real cost is the float. Temps are paid every Friday while clients pay in 30 to 60 days, so a 20-temp desk can need $150,000 or more in working capital. You can build all of it yourself, or launch with the machine already running.

Why a temp desk is nothing like a perm desk

Perm is clean. You fill the role, you invoice the fee, and the candidate becomes someone else's employee. The money is lumpy but the machinery is simple.

Temp is a different business wearing the same suit. The moment you place a casual on a client site, you are the employer. Not the client. You. Their wages land every week, whether or not the client has paid you a cent. Their super, their PAYG withholding, their WorkCover cover, their award classification, their casual loading and penalty rates: yours. A no-show on a Monday morning is your phone call. A disputed timesheet is your Friday afternoon.

If you have run a temp desk inside an agency, you already know the front half of this. The fills, the check-ins, the WIP report. What you may never have seen is the back half, because someone upstairs carried it for you. That is the fog this guide is trying to burn off.

What is the float, and how big does it get?

The float is the wages you pay out before the invoices come back in. It is the single biggest number in temp recruitment, and the one new owners most often underestimate.

Run the arithmetic on a 20-temp desk. These are example figures, not a quote: assume an example pay rate of $35 an hour on a 38-hour week.

• One temp costs $1,330 in gross wages per week.
• Twenty temps cost $26,600 in gross wages every Friday.
• Super at 12 per cent adds roughly $3,200 a week on top.
• Add WorkCover premiums and, once you cross your state threshold, payroll tax. Call the weekly outgoing north of $30,000.

Now the other side of the ledger. Your client is on 30-day terms. In the real world, 30-day terms often means 45 or 60 by the time the invoice is approved, queried once and finally paid. So you fund somewhere between five and eight weeks of payroll before the first dollar comes back: roughly $150,000 to $240,000 for this example desk. And the number grows every time you win a new client, because growth means more wages out before more cash in.

Max Kozin, who runs Trade Plus Recruitment on a Melbourne carpentry desk, put it plainly on a public podcast: supporting 15 carpenters takes "100 to 200 grand in loans" if you fund it yourself. That is not a scare line. It is the arithmetic above with tools on.

The debt that kills temp agencies is not the wages

The wages are painful but predictable. The killer is the money you have already paid out when a client stops paying.

Picture the mechanism. One big client, 20 temps out, eight weeks of billing owed to you. The client goes into administration. Every one of those wage runs has already left your account. The temps were paid, the super was paid, and in this example you are now an unsecured creditor for close to a quarter of a million dollars.

Established agencies protect themselves with trade credit insurance. Here is the part nobody tells first-time founders: insurers generally will not cover a book where any single client sits above roughly ten per cent of the total exposure. A startup with one client is one hundred per cent concentrated. A solo startup is structurally uninsurable for trade credit. Not because you did anything wrong. Because of what a startup is.

So in year one, exactly when a single default would hurt most, you carry client credit risk raw. Every experienced temp operator has watched this end an agency. The invisible cost is not knowing it was there.

What sits on top of the pay rate?

Every hour a temp works, you incur costs the client never sees on the payslip:

• Superannuation. 12 per cent of ordinary time earnings since 1 July 2025, the final legislated increase. Paid by you, on top of the pay rate.
• Workers compensation. Premiums are set by each state scheme and rated by industry. A labouring classification costs far more to cover than a clerical one, and a bad claims year moves your premium.
• Payroll tax. Every state and territory sets its own threshold and rate, and they change. Small desks often sit under the threshold at first, then cross it mid-year without noticing. Check your state revenue office, not a blog.
• Award entitlements. Casual loading, penalty rates, overtime, allowances. The award your temps fall under drives all of it, and misclassification is an expensive mistake to unwind.

How a charge rate is actually built

A charge rate has three layers: the pay rate, the on-costs, and your margin.

Start with the pay rate the award and the market demand. Load every on-cost above onto it: super, workers comp, payroll tax where it applies, statutory extras. What sits between that fully loaded cost and the charge rate is your gross profit. Your GP per hour, per temp, per week. That is the number the whole business runs on.

Here is the trap. A charge rate can look healthy as a multiple of the pay rate and still leave you thin once the on-costs are counted properly, because on-costs differ by state, by industry and by claims history. Two desks charging the same multiple can be earning very different margins. Price from the fully loaded cost, never from a rule of thumb, and read your GP off the WIP report every week.

Do you need a labour hire licence?

If you supply workers to clients in Victoria, Queensland, South Australia or the ACT, yes. Those four jurisdictions run labour hire licensing schemes, and the licence attaches to the entity that employs and pays the workers, in the place the work is performed. NSW and WA currently have no state licence scheme, though both have shown interest in a nationally consistent approach.

South Australia is the one to watch right now. Since 29 January 2026 the SA scheme covers every industry, not just the original five sectors, and the transition period for newly covered providers ends on 29 July 2026. The SA fees for 2025-26 are:

• $973 application fee for an individual
• $2,212 application fee for a body corporate
• $152 to change or substitute a responsible person

Fees are indexed, so confirm them with Consumer and Business Services before you apply. For the full state-by-state picture, see the labour hire licence guide for Australia, and for the SA detail, the dedicated SA labour hire licence guide.

The launch sequence, step by step

1. Register the entity. Company through ASIC, ABN through the Australian Business Register, GST registration through the ATO. Allow a few days end to end.
2. Decide your structure early. Talk to an accountant before you register anything, because the licences, insurances and client contracts all attach to the entity.
3. Apply for licences wherever you will place. Queensland applications go through the Labour Hire Licensing Queensland online portal, Victoria through the Labour Hire Authority portal, South Australia through Consumer and Business Services (CBS recommends allowing at least six weeks), and the ACT through WorkSafe ACT. Each regulator publishes its current processing times. You must hold the licence before you supply a single worker.
4. Register for WorkCover in each state where you employ, and diarise the payroll tax thresholds with your state revenue office.
5. Place your insurances. Workers compensation, professional indemnity, public liability. Ask a broker about trade credit insurance too, and listen carefully to the answer about client concentration.
6. Build the payroll engine. Award interpretation, timesheet capture, Single Touch Payroll, super. Weekly, without fail, from week one.
7. Fund the float. Savings, debt, an invoice funder, or a partner who passes funding through at cost. Compare the options honestly: the payroll funding vs launch partner guide walks the numbers.
8. Credit-check every client before the first fill. Terms in writing, purchase orders confirmed. Then, and only then, put temps out.

The two ways to build it

Path one: assemble it yourself, supplier by supplier

An insurance broker. An invoice funder. A payroll platform. An award interpretation tool. A licence consultant. A bookkeeper. A collections process. A safety consultant for the WorkCover claims you hope never come. Each supplier competent, none of them talking to each other, and you become the integrator while also being the only person who can sell and fill. Plenty of good agencies were built exactly this way. Their founders will tell you the first two years were mostly plumbing.

Path two: launch with the machine already running

This is what xRecruiter was built to be: one point of contact instead of twenty suppliers, run by people who operate the back office of hundreds of recruitment agencies every day.

Licensing, payroll, funding, insurances and collections are all handled inside the platform, so none of it lands on your desk as a project.

The float stops being yours to finance alone, because payroll funding is passed through at cost. Cathy runs the weekly payroll. Phil runs client credit checks before you fill and collections after, so the debt-that-kills mechanism gets managed by someone who does it all day. Charlene handles the WorkCover claims. There are no personal guarantees anywhere in the partner structure.

And it stays your business. Your brand, your clients, your candidates, zero equity taken. xRecruiter takes a share of the gross margin and the majority stays with you. Exact terms go in front of you in writing before you sign.

Max launched Trade Plus Recruitment this way. First deal within three days of opening. Fifteen contractors out by month four. He never signed a personal guarantee. More than 107 recruiters have launched their own agencies on the same machine.

Frequently asked questions

How much does it cost to start a temp agency in Australia?

Registration and licences are the small part: a company setup plus licence fees such as SA's $973 for an individual or $2,212 for a body corporate. The big cost is the float. A 20-temp desk can need $150,000 or more in working capital, unless a partner funds payroll at cost.

Do I need a labour hire licence for a temp agency?

Yes, if you supply workers in Victoria, Queensland, South Australia or the ACT. NSW and WA have no state scheme. Fees and application steps differ by state: the labour hire licence guide has the full picture.

Who pays the temps while I wait for clients to pay?

You do, unless you have structured it otherwise. Temps are paid weekly with super on top, while clients pay in 30 to 60 days. That gap is the float, and it grows with every new client you win. Fund it with capital, an invoice funder, or a partner passing funding through at cost.

What is the superannuation rate for temps in 2026?

Twelve per cent of ordinary time earnings, in force since 1 July 2025 and the final legislated increase. It is paid by the employer on top of the pay rate, which is why every charge rate has to be built from the fully loaded cost, not the pay rate alone.

Can a new temp agency get trade credit insurance?

Usually not. Insurers generally want no single client above roughly ten per cent of total exposure, and a startup with one client is one hundred per cent concentrated. That makes a solo startup structurally uninsurable, so early on you carry client default risk yourself unless a partner's book carries it for you.

How long does the SA labour hire licence take?

Consumer and Business Services recommends allowing at least six weeks for the application, on top of the time it takes to meet the licensing criteria. The SA scheme has covered all industries since 29 January 2026, and the transition period for newly covered providers ends on 29 July 2026.

The next step isn't a sales call

It is a working session with the people who run the machine. Bring your real numbers and your hardest questions. Meet the payroll and compliance leads. Stress-test us on the float, the licence, the award, the collections.

Half the people who sit that session sign. The other half walk away knowing exactly how a labour hire agency works on the inside, and that is theirs to keep either way.

We can start four new agencies a month, so the queue is real. Nothing is public, ever.

Book the session.