The charge rate formula
Charge rate = Pay rate + Oncosts + Margin
Where Pay rate is the amount the worker receives per hour, Oncosts are the statutory and quasi-statutory costs of legally employing that worker (super, workers compensation, payroll tax, leave loading, insurance and payroll processing), and Marginis the agency's gross margin above cost.
Source: HBG oncost configuration (see /rate-calculator) and Fair Work Ombudsman modern award rate structure.
Oncost line breakdown
Every line below sits on top of the base pay rate before the agency's margin is added. Ranges reflect Australian market variation by state, trade classification and payroll size.
| Line item | Typical range | Note |
|---|---|---|
| Base pay rate | 100% | The hourly rate paid to the worker — set by the applicable modern award as a floor.Source: Fair Work Ombudsman modern awards |
| Superannuation guarantee | 11.5–12% | Legislated super rate. 11.5% from 1 July 2024, stepping to 12% from 1 July 2025.Source: Australian Taxation Office |
| Workers compensation (WIC) | 3–8% | Varies by state and by trade classification — construction and demolition sit at the top of the range.Source: State workers compensation regulators (icare NSW, WorkSafe VIC, WorkCover QLD, etc.) |
| Payroll tax | 4.85–6.85% | Only payable once the agency's total wages exceed the state threshold — but applies to every dollar for large providers. NSW 5.45%, VIC 4.85%, QLD 4.75%, SA 4.95%.Source: State revenue offices |
| Leave loading & absence provisioning | ~4% | Provisions for annual leave loading, personal/carer's leave and public holidays where applicable.Source: Fair Work Act 2009 National Employment Standards |
| Payroll processing & insurance | ~4–5% | Public liability, professional indemnity, credit insurance, and the payroll processing fee.Source: HBG oncost configuration (see /rate-calculator) |
| Agency margin | variable | The provider's gross margin above cost — typically 15–25% of the charge rate. This is where service, replacement, back-office and profit sit.Source: HBG placement data — see docs/BUSINESS-CONTEXT.md |
Worked example
This is an illustrative build-up for a construction labourer on a $50/hr pay rate in New South Wales. Actual figures vary by state, classification, shift type and rate agreement — request a tailored quote via /rates-request.
| Line | Illustrative amount |
|---|---|
| Base pay rate | $50.00 / hr |
| Superannuation (~11.5%) | ~$5.75 / hr |
| Workers compensation (construction NSW, ~5–7%) | ~$2.50–$3.50 / hr |
| Payroll tax (NSW, 5.45%) | ~$2.75 / hr |
| Leave loading & absence provisioning (~4%) | ~$2.00 / hr |
| Payroll processing & insurance (~4–5%) | ~$2.00–$2.50 / hr |
| Sub-total (cost to agency) | ~$65.00–$67.00 / hr |
| Agency margin (15–25% of charge rate) | variable |
| Illustrative charge rate | ~$75–$85 / hr |
Source: HBG oncost configuration (src/lib/oncost-server.ts); ATO super guarantee schedule; NSW icare workers compensation classifications; NSW Revenue payroll tax rate. Ranges rounded — the exact figure for any placement depends on trade, state, classification and shift type.
Weekly vs fortnightly billing
Most Australian labour hire agencies invoice weekly, aligned to a Sunday-to-Saturday or Monday-to-Sunday pay week. Some run fortnightly. A weekly cycle usually looks like this:
- Friday–Sunday — site supervisors sign dockets confirming the week's hours.
- Monday morning — the agency reconciles dockets against the allocations grid.
- Monday–Tuesday — payroll runs; workers are paid Tuesday or Wednesday.
- Tuesday–Wednesday — client invoices issue with standard 7-day payment terms.
Source: HBG payroll and invoicing operations. Cycle timing may vary for public-holiday weeks or where the client has an agreed variation.
What is a docket and why does it matter?
A docketis a site record signed by the client's supervisor at the end of each shift confirming the worker's start time, finish time, breaks and any allowances or overtime. It is the evidence layer between the shift being worked and the invoice being raised.
The docket protects both parties. It gives the client an audit trail that the hours billed were actually worked and authorised on site. It gives the worker a paper trail that the hours worked will be paid. And it gives the agency a defensible position under Fair Work Ombudsman audit — every billable hour ties to a signed docket.
At HBG, dockets can be signed on paper, in the client portal, or digitally via SMS confirmation. Every docket ties back to a row in the allocations grid so the audit trail is unbroken.
Source: Fair Work Ombudsman record-keeping obligations (Fair Work Regulations 2009 reg 3.32-3.44).
Overtime and penalty rates
Overtime and penalty multipliers apply to the whole charge rate, not just the pay rate — because oncosts (super, workers comp, payroll tax) scale with wages too. Typical multipliers under the awards HBG works with:
- Weekday overtime (first 2 hours): 1.5×
- Weekday overtime (after 2 hours): 2.0×
- Saturday (first 2 hours): 1.5×
- Saturday (after 2 hours): 2.0×
- Sunday: 2.0×
- Public holiday: 2.5×
Source: Building & Construction General On-site Award 2020 (MA000020); Labour Hire Award 2020 (MA000160); Warehousing Award (MA000084); Manufacturing & Associated Industries Award 2020 (MA000010). See the HBG Labour Market Index at /labour-market-index for a live rate table.
What clients say about transparency
“Harrison Barratt Group transparency and honesty have created a new golden standard for us. I can genuinely say, I have never had a labour hire be so honest about their capabilities — never ones to over-promise. Things like this go a long way and are what keeps us going back to Seb and the HBG Team.”
“HBG didn’t just provide us with workers; they delivered a solution that became an integral part of our success. Their support has been invaluable, and we consider them a key partner in our continued growth.”
Source: HBG client reviews (published on /reviews). Author first names and company categories are the anonymisation applied where the reviewer requested anonymity.
Frequently asked questions
- What is a labour hire charge rate?
- The charge rate is what the host business pays the labour hire agency per hour worked. It equals the worker's pay rate + oncosts (super, workers compensation, payroll tax, leave loading, insurance, payroll processing) + agency margin. The pay rate goes to the worker; the oncosts and margin cover employment costs and the agency's service.
- What are oncosts in labour hire?
- Oncosts are all the costs of legally employing a worker on top of the base pay rate: superannuation guarantee (11.5–12%), workers compensation insurance (typically 3–8% depending on state and trade), payroll tax (4.85–6.85% depending on state), leave loading and absence provisioning (~4%), and payroll processing plus other insurances (~4–5%). Total oncosts typically add 25–35% on top of the base pay rate before any margin.
- How do you calculate a labour hire charge rate?
- Take the pay rate — say $50/hr. Multiply by an oncost factor of 1.25–1.35 to cover super, workers comp, payroll tax, leave loading, insurance and payroll processing. That gives an all-in cost of roughly $62.50–$67.50/hr. Then add the agency margin (15–25% of the final charge rate) to reach a charge rate of roughly $75–$85/hr. Because workers compensation and payroll tax vary by state and trade, the exact charge rate is quoted case-by-case.
- What is a docket in labour hire?
- A docket is a site record signed by the client's supervisor at the end of each shift confirming the worker's start time, finish time, breaks and any allowances or overtime. It is the evidence layer between the shift being worked and the invoice being raised — the docket authorises the invoice. Without a signed docket, hours cannot be billed and, in most agencies, cannot be paid to the worker either.
- How often are labour hire invoices raised?
- Most Australian labour hire agencies invoice weekly, aligned to a Sunday-to-Saturday or Monday-to-Sunday pay week. Some run fortnightly. The agency processes dockets Friday afternoon to Monday morning, pays workers on Tuesday or Wednesday, and issues the client invoice at the same time. Standard payment terms are 7 days for labour hire (compared with 30 days for permanent placements).
- What happens if there is no docket for a shift?
- If no docket exists, HBG and other reputable agencies will follow up with the site supervisor before invoicing. If the shift can be confirmed by another means (SMS, email, allocation system) it can still be billed; if it cannot be confirmed at all it is not billed to the client and the worker's claim is investigated. Modern labour hire platforms (including HBG's allocations grid) tie every billable hour to a docket record for audit purposes.
- Are overtime and penalty rates included in the charge rate?
- Overtime and penalty rates are calculated on top of the base charge rate using the multipliers set by the applicable modern award — typically 1.5× for the first two hours of overtime, 2.0× thereafter, 1.5–2.0× for Saturday work, 2.0× for Sunday, and 2.5× for public holidays. The multiplier applies to the whole charge rate, not just the pay rate, because oncosts (super, workers comp, payroll tax) also scale with wages.
- Can the charge rate change during a placement?
- Charge rates generally hold for the duration of a rate agreement. They may adjust if the Fair Work Commission Annual Wage Review lifts the underlying award rate (each 1 July), if the applicable classification changes (e.g. a worker moves from CW1 to CW3), or if the shift type changes (e.g. day shift to night shift). Reputable agencies notify the client in writing before any rate adjustment takes effect.
Cited sources
- Fair Work Ombudsman — Award interpretation, minimum wage, entitlements enforcement.
- Fair Work Commission — Modern awards, Annual Wage Review, workplace determinations.
- Recruitment, Consulting & Staffing Association (RCSA) — Industry code of conduct for labour hire and recruitment agencies in Australia and NZ.
- Safe Work Australia — Model WHS laws — the framework each state and territory adopts.
- Australian Taxation Office — Super Guarantee rates — legislated super guarantee percentage by financial year.