Cost calculator · Labour hire vs permanent · Sydney
Permanent hire vs labour hire: the cost calculator
Labour hire costs more per hour. A permanent hire costs more up front and keeps costing when the work stops. Which is cheaper depends on how long you need the role filled. Put in your numbers and find the break-even point.
- Break-even point
- Temp-to-perm option
- Estimate only
Enter your own quote and pay rate. Nothing is pre-filled, and the results are percentages and weeks.
The question is how long, not how much per hour
Per hour, labour hire costs more than a permanent employee on the same pay. It has to. The provider carries the leave cost, the on-costs, the downtime between placements and the risk, and it earns a margin.
Per role, the picture changes. A permanent hire costs money before the first shift (recruitment, onboarding, tickets, PPE) and keeps costing through leave, public holidays and quiet weeks. Labour hire charges for the hours worked and stops when the work stops.
So there is a break-even point. Before it, labour hire is cheaper. After it, a permanent hire is. The calculator finds it from your numbers. It also prices the third path, temp-to-perm, where you try the person on your site and convert them on terms agreed up front.
Calculator
Break-even calculator
Enter the charge rate from your quote and the pay rate you would actually pay, in the same currency. Nothing is pre-filled. The calculator shows relative cost, percentages and break-even weeks, never an amount. The applicable award or agreement is the floor for the pay rate.
Assumptions
| Assumption | Value | Note |
|---|---|---|
| Superannuation guarantee | 12% of wages | 1 Fixed |
| NSW payroll tax | 5.45% of wages plus super above the annual threshold set by Revenue NSW, 2026-27 | 2 You can change it above |
| Leave | Four weeks of annual leave and ten days of paid personal leave a year, under the National Employment Standards | 3 Fixed |
| Charge rate and pay rate | Entered by you, in your own currency. The applicable award or agreement is the floor for pay: see the Fair Work Ombudsman pay guide for the Manufacturing Award classifications. Results are shown only as percentages and weeks | 4 You can change it above |
| Workers compensation, other on-costs, recruitment cost and onboarding cost | 3.5% and 2% of wages, 15% of annual salary and 50 hours of pay. Placeholders | You can change it above |
| Temp-to-perm | 12 weeks as labour hire, then a 10% conversion fee. Placeholders: use the terms agreed in writing | You can change it above |
What the numbers leave out
- All three options are compared on the same number of productive hours.
- The model does not price time to hire, notice periods, redundancy exposure, a bad hire, supervisor time or the ramp-up of a new starter. Those usually favour labour hire for short or uncertain work and a permanent hire for stable work you know you will keep.
- Where a regulated labour hire arrangement order applies, a labour hire worker must be paid at least the host's protected rate of pay, which can raise the charge rate.
- Direct hires carry other costs this model leaves out, such as long service leave and payroll administration.
Reading the result
- Break-even. Where the labour hire charge is roughly 180% to 185% of permanent hourly pay and the placeholder on-costs apply, direct hire catches up after roughly 22 to 25 weeks. Yours will differ. Short or uncertain work sits on the labour hire side of the line. Long, stable work sits on the other.
- Temp-to-perm. It carries the labour hire premium for the trial weeks, then a conversion fee. What you buy is certainty: you have seen the person work on your site before you commit.
- What the model leaves out. Time to hire, notice, redundancy exposure, a bad hire and the ramp-up of a new starter. Those usually favour labour hire for short or uncertain work, and a permanent hire for work you know you will keep.
- Pay rates. Use the same pay assumptions for both options. The point is a like-for-like comparison.
Three ways to engage
| Option | How you pay | Best for |
|---|---|---|
| Labour hire | By the hour worked. We employ and pay the worker, you direct the work | Cover, peaks, shutdowns and work of uncertain length |
| Temp-to-perm | Hourly, then a conversion fee agreed in writing when the placement starts | Roles you may keep, where you want to see the person work first |
| Permanent recruitment | A search fee, on placement (contingent or exclusive) or part up front (retained). Then you employ the person | Roles you know you will keep |
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Questions
Cost questions
When is labour hire cheaper than a permanent hire?
When the work is short, uncertain or seasonal. You pay for the hours you use, with no recruitment fee, no paid leave and no cost when the work stops. Where the labour hire charge is roughly 180% to 185% of permanent hourly pay and the placeholder on-costs apply, direct hire catches up after roughly 22 to 25 weeks. Yours will differ, so put in your own quote and pay rate.
When is a permanent hire cheaper?
When the role is stable and you will keep it longer than the break-even point. The recruitment and onboarding cost is spread over more weeks, and you stop paying the provider's margin. Permanent hiring also carries risks the calculator does not price, such as a bad hire, notice and redundancy.
Is temp-to-perm cheaper than a straight permanent hire?
It can be. You see the person work on your site before you commit, and the terms are agreed up front. The calculator shows the trial weeks at the labour hire rate, then the conversion fee, then the direct cost. Use your own conversion terms, not the placeholder.
What does payroll tax mean for the comparison?
In NSW, payroll tax is 5.45% of wages above an annual threshold set by Revenue NSW.2 A labour hire provider above the threshold builds it into its rate. If your own business is under the threshold, a direct hire attracts none, so switch the payroll tax input to No.
Does the calculator include superannuation and leave?
Can you give me an actual quote?
Yes, against a real brief. Tell us the trade, the tickets, the shift and the duration and we will build the rate on the award or your agreement and show the build-up. Permanent fees are agreed in writing before a search starts.
Do you charge to convert a temp to permanent?
Conversion terms are agreed in writing when the placement starts, so there are no surprises when you decide to keep the person. Tell us when you are ready to make the offer.
Sources and notes
- Australian Taxation Office: Key superannuation rates and thresholds. Superannuation guarantee rate of 12% from 1 July 2025. Accessed 3 October 2026.
- Revenue NSW: Payroll tax thresholds and rates. 5.45% above the annual threshold in 2025-26 and 2026-27. Accessed 3 October 2026.
- Fair Work Ombudsman: National Employment Standards. Four weeks of paid annual leave (five for some shiftworkers) and ten days of paid personal or carer's leave a year for full-time employees. Accessed 3 October 2026.
- Fair Work Ombudsman: Pay Guide, Manufacturing and Associated Industries and Occupations Award [MA000010]. Manufacturing Award classifications and the applicable minimums, effective from the first full pay period on or after 1 July 2026. The pay guide has the current hourly rate for each level. Accessed 3 October 2026.
Ready when you are
Short job or long job, tell us which.
We will quote the labour hire route, the temp-to-perm route or a permanent search against your real brief.