Labour hire vs hiring direct
Who carries the payroll, insurance and visa risk under each model — and when each one actually makes sense for a regional operation.
The question isn't which model is cheaper per hour — it's who carries the risk when something goes wrong. Here's the honest comparison.
Hiring direct
You are the employer. You run payroll, withhold PAYG, pay super, hold workers compensation, check visa work rights, classify the role under the correct Award, and answer to the Fair Work Ombudsman if any of it is wrong. For permanent core staff you know and keep, this is usually right — you control everything and pay no margin.
Labour hire
The workers are employed by the labour-hire provider. They run the payroll, carry the workers comp, verify the visas and wear the compliance risk; you pay an hourly bill rate and direct the work. The bill rate is higher than a raw wage — because it includes super, insurance, leave loadings and the provider's compliance work that you'd otherwise be doing at midnight in spreadsheet form.
Where each wins
- Short, sharp seasonal peaks — labour hire, almost always. Recruiting, onboarding and paying 30 pickers for six weeks is exactly the overhead you don't want to own.
- Visa-holding workers — labour hire shifts the work-rights verification burden to the provider. Employing someone without valid work rights carries serious penalties under the Migration Act, even when it's accidental.
- Permanent skilled roles — direct employment, often via sponsorship. Note that for sponsored visas (482, 494), the sponsoring business is the legal employer — a labour-hire provider can manage the process, but the worker sits on your payroll.
- Trying before committing — labour hire first, then transition the worker to direct employment once you both know it fits. Good providers support this rather than blocking it.
The questions to ask any provider
- Who exactly employs the worker, and can you show me the workers comp policy?
- How do you verify visa conditions — and how often do you re-check them?
- Which Award and classification is the role paid under?
- Are workers ever charged fees? (The only acceptable answer is never.)
Tell us the roles. We'll map the workforce.
Headcount, region, start date — a tailored proposal within 48 hours.