Labour hire agencies quote different rates for the same role because the quotes are rarely built on the same assumptions. A job title such as warehouse operator or process worker does not fix the classification level, the employment type, the roster, the oncosts or the margin behind the hourly figure. Two quotes can both be accurate and still sit far apart, and the gap is usually explained by what each one includes.
This guide is for managers in manufacturing, warehousing and trades around Melbourne who hold two or three quotes and need to know which one to trust. Chandler Personnel is a labour hire and permanent recruitment business in Melbourne, and its page on labour hire in Melbourne gives the service background. For the full sum that turns a wage into an hourly cost, see labour cost per hour. This guide focuses on why providers land on different numbers.
Same job title is not the same classification
A job title describes the work. A classification sets the pay level for it. Awards are legal documents that outline minimum pay rates and conditions of employment, according to the Fair Work Ombudsman's page on Fair Work awards, and a classification inside an award or agreement ties a worker's skills and duties to a rate.
Two agencies can therefore price one title differently without either being wrong. One may place a forklift operator at a higher level because of the tickets and duties it assumes. Another may price the same title at an entry level because it has assumed supervised, simpler tasks.
The instrument can differ too. Fair Work says labour hire employers hire their employees and are responsible for providing them with their pay and entitlements, so a provider prices from its own award or agreement. The Fair Work page on labour hire and supply chains sets this out. A separate guide on how an EBA affects labour hire pricing covers the case where an order ties pay to a host's agreement. Where no order applies, each provider can start from a different instrument.
Loadings and roster assumptions inside the rate
Before any oncost is added, a quote already carries assumptions about when and how people work. These are the usual ones:
- Employment type. A casual worker is entitled to a casual loading or a specific casual pay rate, according to the Fair Work page on casual employees. An agency quoting casual hire and one quoting a longer arrangement are not pricing the same thing.
- Penalty rates and overtime. Evening, night and weekend hours can pay more than weekday daytime hours. A quote built on a day roster will look cheaper than one priced for a split shift.
- Hours assumed. One agency may price a standard week, another a week with regular overtime. Neither will say so unless you ask.
- Minimum engagement. A minimum number of paid hours per shift raises the effective rate on short bookings.
The practical fix is to hand every agency the same roster. Give the start time, finish time, break pattern, days per week and expected overtime, then ask each one to price exactly that.
Statutory oncosts that sit under the charge rate
A charge rate is the hourly figure an agency quotes you. The worker's wage is only one layer of it. Labour hire oncosts sit under the rate, and the main statutory ones are superannuation, WorkCover insurance and payroll tax.
Each is handled differently between providers. Super is an employer cost, and the provider is the employer of the labour hire worker. WorkCover is calculated from the employer's own remuneration and industry rate, so two providers do not pay the same amount for the same role. On payroll tax, the State Revenue Office says that under an employment agency contract the agency is deemed to be the employer and pays payroll tax on the wages it pays the worker. How much that costs each provider depends on its own position.
We do not quote percentages here, because they change and differ by provider. The labour cost per hour post linked above explains how these lines are built and points to the official sources. What matters for a comparison is whether each quote includes them in the figure or adds them as extras.
Paid time that produces no work matters too. Leave and training time are paid for by the employer, so a provider has to recover them in the charge rate. A quote that ignores them will look lower and then be corrected later.
Margin and service scope
Margin is what a provider keeps after wages and oncosts, and it pays for the agency's own running costs. Agency margin in labour hire is not published and does not follow a standard figure. Ask for it as a line on the quote rather than guessing. If a provider will not split it out, compare the total against the service it lists.
Service scope explains a lot of the remaining gap. Consider what the rate might cover:
- Site induction delivery and ticket checks before the first shift.
- Replacement cover when a worker does not arrive.
- Out-of-hours contact for shift problems.
- Visits to check on workers at the site.
Chandler Personnel, for example, runs site inductions on behalf of clients, drives out to farms and factories to check on workers and is available 24 hours a day. Whatever provider you use, those services belong in writing next to the rate, not in a verbal promise.
Fair Work also warns that businesses in a contracting chain can be held responsible when workers miss minimum entitlements. An unusually low rate that cannot cover lawful pay, oncosts and a margin is a question for the provider, not a bargain.
How to line two quotes up side by side
Quote comparison works when every provider answers the same questions in the same order. Put these headings on a single page and fill in one column per agency:
- Role and classification. The job, the level and the award or agreement behind it.
- Employment type. Casual or ongoing, and the loading that applies.
- Roster priced. Start and finish times, days per week, overtime and public holidays.
- Penalties and allowances. Which ones are in the rate and which are charged as extras.
- Oncosts. Super, WorkCover and payroll tax, shown inside the rate or listed as extras.
- Margin and fees. Any placement, conversion or admin fee, plus the agency margin if disclosed.
- Service scope. Inductions, replacement cover, out-of-hours contact and site checks.
- Minimum engagement and cancellation. Minimum hours per shift and notice terms.
If you buy labour regularly, our guide to the Melbourne staffing tender shows how to run the same process across several providers. Roster patterns also differ by site. A warehousing labour hire request and a manufacturing labour hire request will not share the same assumptions, so write the template for the work you actually need done.
Related Resources
- Fair Work awards
- Labour hire and supply chains
- Labour hire in Melbourne
- Labour cost per hour
- Melbourne staffing tender
- Warehousing labour hire
- Manufacturing labour hire
Common Questions About Comparing Labour Hire Quotes
1. Why do two agencies quote different rates for the same role title?
A role title does not fix the classification level, the employment type, the roster, the oncosts or the margin. Each agency fills those gaps with its own assumptions, so the hourly figures differ. Ask both to state the award or agreement, the level and the roster they priced.
2. What oncosts usually sit under a labour hire charge rate?
Superannuation, WorkCover insurance and payroll tax are the main statutory ones, and the provider carries them as the employer. Paid leave and training time also have to be recovered. Ask each provider to show how it builds these lines, because the amounts vary by business.
3. Should I pick the lowest hourly rate?
Not until the quotes are lined up. A low figure can reflect a lower classification, a day-only roster, oncosts listed as extras or a thinner service. Compare the full build, and treat a rate that looks too low to cover lawful pay as a reason to ask questions.
4. How do casual loadings change a quote?
A casual worker is entitled to a casual loading or a specific casual rate under the applicable award, agreement or contract. That loading raises the hourly wage, so a casual quote and an ongoing quote are not comparable. Check which employment type each provider has priced.
5. What should a like-for-like quote template include?
Include the role and classification, employment type, roster priced, penalties and allowances, oncosts, margin and fees, service scope, and minimum engagement and cancellation terms. Send the same template to every provider so the answers line up.
Line Up the Assumptions First
Different rates for the same role are normal, and they tell you where the assumptions differ. Fix the roster, name the classification, ask for oncosts and service scope in writing, and the quotes become comparable. When you are ready to brief providers, start from the request staff page.
