How Much Does Labour Hire Cost?
Bringing on workers through a labour hire provider is a significant cost to your business, so it is important to understand what exactly you are paying for. In this article, we break down how much labour hire costs in Perth, including factors such as what makes up an hourly charge rate and comparing what the same worker would cost you as a direct employee.
What is labour hire?
Labour hire is where a provider employs a worker and supplies them to your business to work on your site, under your direction.
The provider remains the legal employer, meaning they are responsible for paying the worker’s wages, superannuation, tax and workers’ compensation. They then invoice your business a charge rate for every hour or shift that worker completes. Your supervisors decide what the worker does each day and manage them the same way they manage their own staff.
How much does labour hire cost per hour?
Labour hire rates vary considerably by industry and role. Across most industries, typical labour hire charge out rates in Australia in 2026 sit between $48 and $105 per hour excluding GST.
Here is how that breaks down across common role types, based on published 2026 market ranges:
| Sector | Indicative hourly range (ex GST) |
| Manufacturing and Fabrication | $53.00 – $85.00 |
| Warehousing and Logistics | $48.00 – $65.00 |
| Building and Construction | $49.00 – $85.00 |
| Administration and Clerical | $50.00 – $85.00 |
| Professional and Management | $70.00 – $105.00 |
What is included in a labour hire charge rate?
A charge rate covers the worker’s wage plus the cost of employing that person legally, plus the provider’s margin. The wage itself is usually a bit over half of the total.
| Component | What it covers |
| Base hourly rate | The award or above-award rate paid to the worker |
| Casual loading | 25% on top of the base rate under most modern awards |
| Superannuation | 12% of ordinary time earnings from 1 July 2025 |
| Workers compensation, including principals indemnity insurance | Premium set by the state scheme and industry risk rating |
| Payroll tax | Applies once the provider is over the state threshold |
| PPE and consumables | Boots, hi-vis, hard hat, gloves, glasses |
| Inductions and training | Ticket verification, site inductions, compliance checks |
| Recruitment and replacement | Sourcing, screening, reference checks, backfill |
| Payroll and administration | Timesheets, invoicing, insurance, compliance records |
| EAP and Employee Support | |
| Provider margin | The provider’s profit |
Casual loading and superannuation are the two line items most often overlooked when businesses compare labour hire to hiring directly.
Casual loading is a 25 percent uplift on the base rate that most modern awards require for casual workers. It is paid in place of annual leave, personal leave and notice, and it is a legal requirement.
Superannuation is 12 percent of ordinary time earnings from 1 July 2025, and for casual workers it is calculated on wages that include the casual loading. Under a labour hire arrangement, the provider pays the worker’s superannuation because they are the legal employer. If you employ the person directly, that cost sits with your business.
Trying to work out what a role would cost you? Most providers will price a specific role for you before you commit to anything. Have a chat with our team and we will give you a rate for the work you need done.
What are the hidden costs of hiring someone directly?
The costs below do not appear on a payroll report, but they affect what the role costs you.
Recruitment costs
Advertising, screening, interviewing and reference checking for a single hire typically costs between $5,000 and $30,000, depending on the seniority of the role and whether you use an agency.
Your own time
Writing the advertisement, sifting applications, running interviews, preparing the contract, completing the onboarding and inducting the person onto site all come out of your week or your manager’s week. For a business owner, those hours usually come out of work that generates revenue.
Ongoing administration
Once the person starts, someone in your business processes their timesheets, runs their pay, remits their superannuation, manages their leave balances, and keeps their records compliant.
Equipment and PPE
Boots, hi-vis, hard hats, and any PPE the role requires.
Exit costs
If the hire does not work out, you carry the accrued leave liability and any applicable notice or redundancy obligations.
Replacement costs
If your new employee does not pass probation, you have already spent time and money on recruitment, onboarding, inductions and training. You then need to pay to find and train a replacement, while your team covers the vacant role. For an entry-level role, you could face replacement costs of 30–50% of the employee’s annual salary, depending on the role, how much you have invested and how soon you need to recruit again.
Is labour hire cheaper than hiring directly?
It depends on how long the work will last, so an hourly charge rate and an hourly wage are not directly comparable.
Labour hire costs more per hour because the charge rate bundles in costs you would otherwise pay separately and at different times of the year. You only pay for the hours the worker is on site, rather than carrying annual leave, sick leave, public holidays and quiet periods the way you would with a permanent employee. You also avoid the recruitment cost, the notice period, and the exit liability that come with employing someone directly.
Hiring directly costs less per hour over a long period, provided the person stays and the role continues to exist.
You can use labour hire to reduce your company’s hiring risk by trialing a worker before offering permanent employment or bringing in extra people as your workload increases. If the placement does not work out or demand drops, you can arrange a replacement or end the assignment under your provider’s terms, limiting your exposure to exit costs and ongoing full-time wages.
The comparison worth running is total cost over the length of time you expect the work to last. If you need four extra people for a six-week seasonal peak, labour hire will almost always be cheaper once recruitment, ramp-up and exit costs are counted. If you are filling a supervisor role you expect to exist for the next five years, hiring directly will cost you less.
Talk to Skill Hire about your workforce needs
Skill Hire has worked with Western Australian employers for more than 40 years. We have dedicated labour hire and permanent recruitment teams, and we are a Registered Training Organisation and a Group Training Organisation, which means hiring, training, apprenticeships and traineeships are all covered in one place.
Tell us what the work involves, and we will build a solution around it, whether that is labour hire, permanent recruitment, apprentices and trainees, or training for the people you already have.
* The figures in this article are indicative market estimates current as of October 2026 and do not constitute a quote. Rates vary by role, location, shift pattern and award, and Skill Hire reserves the right to amend these estimates at any time.
