What's Included in a Labour Hire Hourly Rate in 2026?
Sydney labour hire hourly rate breakdown for 2026: CW1 base pay, 12% super, workers comp, payroll tax*, overhead, margin. Line-by-line, no hiding.
A Sydney labour hire hourly rate in 2026 is built from five mandatory blocks — a CW1 general labourer stacks to the low-$50s/hr ex-GST.
- CW1 award base pay: ~$38/hr casual (MA000020, includes 25% casual loading)
- Superannuation: 12% of ordinary time earnings from 1 July 2025
- Workers compensation: ~5% for construction WIC (icare NSW, held by agency)
- NSW payroll tax: 5.45% for agencies above the $1.2M wages threshold (not universal)
- General overhead + agency margin: PPE, compliance, recruitment amortisation, operating costs
A Sydney CW1 labourer earns roughly $38/hr after casual loading. The bill rate lands in the low-$50s/hr ex-GST. Where does the rest go — and which lines are mandatory for every supplier versus only the large ones?
Most labour hire invoices show a single number. A transparent rate has five components. This article walks through each one with 2025-26 figures from Fair Work (MA000020), the ATO, Revenue NSW, and icare.
The Five Components of Every Rate
Every Sydney labour hire rate — yours, ours, the agency down the road — is built from the same five blocks.
The on-costs aren't optional for the suppliers that bear them. Super and workers comp apply to every employer. Payroll tax only applies to suppliers above the $1.2M NSW wages threshold — so it's a real cost for large agencies but not for small operators or in-house teams. If the supplier is large enough to be paying it, the host site is paying it on the charge-out — full stop.
Compliance Warning — Both Sides Are Exposed
This isn't just a supplier problem.
- If you're not paying compliant rates, you MAY get punished. Host PCBUs carry accessorial liability under the Fair Work Act when they "knew or ought to have known" the rate was below award.
- And your supplier MAY get punished too. The Fair Work Ombudsman, ATO, icare, and Revenue NSW all run audits on labour hire agencies — underpayments and unpaid super are the most-prosecuted patterns.
- Both sides exposed. A non-compliant rate isn't a saving — it's a deferred bill with penalties attached, and the FWO can name your project in the press whether the underpayment was yours or your supplier's.
If you can't see the maths on a quote, you can't show good faith in an audit. That's the spine of why this post exists.
Component 1 — Worker Base Pay (CW1, MA000020)
The relevant instrument for Sydney construction is the Building and Construction General On-site Award 2020 (MA000020). CW1 is the most common classification — general labourers on site, and the default starting point for any labour hire rate conversation.
CW1 minimum rate for 2025-26 (Fair Work):
- Ordinary rate (industry allowance already folded in): approximately $30.50/hr
- Casual loading: +25%
- CW1 casual all-in: approximately $38/hr for a standard weekday shift
Always verify the current live figure on the Fair Work Pay Calculator before signing — award rates move every 1 July.
Conditional allowances (only when they actually apply)
Casual minimum engagement means once a worker shows up, you pay at least four hours — even if the day ends early. Wet weather is handled by the wet-weather clause in your labour hire agreement, not by a blanket "weather payment."
EBA sites: CFMEU EBA rates run well above award. If your site is on an EBA, the rate floor moves. Ask which instrument the rate is built on. Get it in writing.
Full pay guides: fairwork.gov.au — MA000020 summary and the Fair Work Pay Calculator.
Component 2 — Superannuation (12%)
Super is the easiest line to verify — it's a fixed percentage of ordinary time earnings, set by federal law.
- $38.13 × 12% = $4.58/hr
- If an agency quotes on 11.5% (the 2024-25 figure), they're either out of date or pocketing the difference. Either way, the worker's super fund is short.
Payday Super from July 2026: The rate stays at 12%, but super must reach the worker's fund within seven business days of every pay run — not quarterly. For labour hire firms, the quarterly float disappears. If your agency goes under owing super, the workers on your site are holding empty accounts — and the cost is theirs but the reputational damage is yours.
Component 3 — Workers Compensation Premium
In NSW, workers comp runs through icare. Labour hire suppliers to construction sit in a high-risk WIC — typically 4-6% of wages. Premiums have risen 8% for 2025-26 (the third and final capped increase).
- For our CW1 example: $38.13 × 5% = ~$1.91/hr
Why this is the line agencies fudge
Workers comp is invisible to clients. A dodgy operator can quote using a lower-risk WIC, run under-insured, or carry premium debt until cancellation. When a claim gets rejected because the WIC didn't cover construction, the host employer becomes the target — you allowed the worker on site and carry the duty of care under WHS law regardless of who payrolled them. See Host Employer Responsibilities for the full liability picture.
Ask any agency for their icare Certificate of Currency before the first shift. A compliant operator emails it inside an hour. If they get defensive, that's your answer.
Component 4 — NSW Payroll Tax (5.45%)*
* This component is conditional — not universal.
- NSW payroll tax applies only to employers whose annual NSW wages exceed $1.2 million (2025-26 threshold).
- Most small clients and small in-house teams sit below the threshold and pay nothing.
- Large labour hire agencies sit well above $1.2M — so the 5.45% flows into every dollar of wage they charge you.
- It's calculated on wages plus super contributions: ($38.13 + $4.58) × 5.45% = $2.33/hr in our CW1 example.
If a small supplier charges you a "payroll tax" line, ask whether they're actually above the threshold. If a large supplier doesn't show it, ask where it's hiding in the rate.
Component 5 — General Overhead and Agency Margin
General overhead (~$0.85/hr): Public Liability + Professional Indemnity insurance ($20M PL minimum). White card verification, HRWL checks, drug & alcohol screening, PPE, payroll processing, Single Touch Payroll reporting, and from July 2026 — daily super reconciliation under Payday Super.
Agency margin (~$4.20/hr): Sustainable Sydney labour hire margins run 8-12% of base pay — roughly $3-$5/hr on a CW1 rate. Under 5% and the agency is one bad week from cashflow trouble.
The Full Build-Up — CW1 Worked Example
A general labourer, casual, standard weekday award site. Numbers are 2025-26 (MA000020).
Illustrative example only. These numbers don't reflect Leap's actual pricing or charge structure — we're showing how the maths is built. Real rates depend on classification, site, day type, supplier size (payroll-tax-threshold question), and the current Fair Work tables. Verify award rates at fairwork.gov.au/pay-and-wages/pay-calculator.
Toggle agency margin off in the calculator below to see cost-to-supply only.
Build your own labour hire bill rate
Pick award classification, day type and casual status. The breakdown updates live.
Why "Cheap" Agencies Aren't Actually Cheaper
Strip the example back to mandatory employment costs only (for a large supplier above the payroll-tax threshold): $38.13 + $4.58 + $1.91 + $2.33 = $46.95/hr in pure compliance cost (illustrative — verify award rates at fairwork.gov.au/pay-and-wages/pay-calculator). That's the floor for this illustrative CW1 build — no insurance, no PPE, no admin, no margin.
So when Agency B quotes $42/hr for the same role, ask where the $4.95 went. Three options (covered in depth in Warning — Labour Hire Compliance: Avoid the Cheap):
- Underpaying the worker — paying $28/hr flat instead of award. The FWO recovered hundreds of millions for underpaid workers in 2024-25; anonymous tip-offs surged. Source: Fair Work Ombudsman Annual Report.
- Cutting compliance — wrong WIC on workers comp, skipping payroll tax registration, late super. Each one is a ticking ATO / icare / Revenue NSW audit.
- Both — most common. The agency is structurally insolvent the day it quotes you.
Cash Jobs — What the Law Actually Says
Paying workers cash-in-hand isn't a grey area:
- Illegal under Fair Work and the ATO — wages must be reported via Single Touch Payroll; PAYG withheld and remitted every pay cycle.
- No workers comp cover — if a worker is injured on a cash arrangement, the host PCBU carries the workers comp exposure directly under the NSW WHS Act.
- Sham contracting penalties — civil penalties apply under the Fair Work Act (verify current figures on the Fair Work sham contracting page).
- ATO penalties — apply to both the engager and the worker. Voluntary disclosure before audit reduces penalties but doesn't eliminate them.
If someone offers you a cheaper rate "off the books," the discount is your liability exposure repriced.
How to Read a Labour Hire Quote
Most reputable labour hire agencies — Leap included — quote a single all-in $/hr per worker classification, not a line-itemised P&L. A General Hand might be $47/hr, a Construction Labourer $50/hr, a Skilled Labourer $55/hr. The maths shown above sits inside that single number. You shouldn't have to audit a line-by-line breakdown — that's the supplier's job, not yours.
What you SHOULD verify is whether the worker is being paid lawfully. That's the real audit.
The only line items you need to see are the ones that affect you on a job-by-job basis:
- Travel allowance (~$25/day on all jobs except fixed-location ongoing roles)
- Overnight allowance (~$250/night for stays outside Sydney metro)
- Minimum hire (industry standard: 4 hrs/shift)
- Cancellation policy (typical: under 12hr notice = 2hr charge; under 1hr = 4hr charge)
- Engagement mode — On-Hire (you direct day-to-day work) vs Subcontract (agency supervises to a defined outcome). Different tax/risk treatment.
Three documents to request before the first shift:
- icare Certificate of Currency — workers comp, active for construction WIC
- Public Liability Certificate — $20M minimum is the Sydney commercial floor
- Sample payslip (worker-name redacted) showing pay at or above the applicable Fair Work / EBA rate
If an agency refuses to provide those three, the issue isn't "they don't want you to see the maths" — it's that they likely can't pass an audit. That's what you actually need to know.
Get a Transparent Quote
Send us the role, classification, site address, EBA or award, and start date. Rates in your email in minutes. Every component shown. Every percentage current to 2025-26 Fair Work, icare, and Revenue NSW figures.
Get a transparent rate breakdown →
For the full series on labour hire pricing in Sydney, see our parent guide: Labour Hire Cost Breakdown — The Complete Sydney Guide. For the bigger build-vs-rent question, read Is Labour Hire Worth It? An Honest Cost-Benefit Analysis.
Frequently Asked Questions
What's included in a labour hire hourly rate in 2026?+
A 2026 Sydney labour hire rate covers the worker's base pay under MA000020 (already inclusive of the industry allowance), 12% superannuation, NSW workers compensation premium (~5% in construction), NSW payroll tax at 5.45% if the agency is above the $1.2M wages threshold, general overhead (PL/PI insurance, PPE, compliance checks, payroll processing), and the agency's margin. For a CW1 general labourer casual, the mandated employment costs alone land in the mid-$40s/hr range before any margin.
What is the CW1 minimum rate for 2026?+
Under the Building & Construction General On-site Award (MA000020), the CW1 ordinary rate for 2025-26 sits around $30.50/hr (the industry allowance is already folded into the headline figure on Fair Work). Add the 25% casual loading and a casual CW1 labourer earns roughly $38/hr for a standard weekday shift. Always verify the live figure on the Fair Work Pay Calculator before signing a contract — award rates update every 1 July.
Does every labour hire agency pay NSW payroll tax?+
No. NSW payroll tax (5.45%) only applies once an employer's annual NSW wages exceed the $1.2 million threshold for 2025-26. Large established agencies sit well above the threshold so it flows into every charge-out rate, but small agencies and small businesses hiring directly may sit below it. If the line appears on a quote, it's a fair component for large suppliers — not a universal requirement.
What is the super guarantee rate in 2026?+
The Superannuation Guarantee rate is 12% of ordinary time earnings from 1 July 2025 — the final legislated increase. From 1 July 2026, Payday Super rules require employers to pay super on every pay run (not quarterly), with contributions reaching the worker's fund within seven business days of payday.
Is the cheapest labour hire agency actually cheaper?+
Usually no. Mandated employment costs — base pay, super, workers comp, and payroll tax for large suppliers — are fixed by law. Two compliant agencies on the same CW1 casual role rarely differ by more than $2-4/hr all-in. A quote materially below that range is either running a thinner margin, cutting corners on compliance, or paying the worker below award. The risk of an underpayment or sham-contracting finding flows back to the host site through accessorial liability.
Are cash-in-hand labour hire jobs legal?+
No. Wages must be reported via Single Touch Payroll, PAYG withheld and remitted, super paid, and workers comp cover maintained. Cash arrangements breach Fair Work, ATO, and NSW WHS rules. If a worker is injured on a cash arrangement, the host PCBU carries the workers comp exposure directly, and sham-contracting penalties apply to both engager and worker.
How fast can Leap Labour quote a rate?+
Rates in your email in minutes. Not days. Send the role, classification, site address, award or EBA, and start date — we reply with a full line-item breakdown showing base pay, super, workers comp, payroll tax (where applicable), general overhead, and our margin. No phone tag. No vague "$45 all in" answers.
