As Australia’s workforce evolves in 2025, employment agencies play an increasingly pivotal role in connecting talent with opportunity. Whether you’re a business looking to fill critical roles or a job seeker navigating the job market, understanding how employment agency fees work—and what’s changed recently—can help you make smarter decisions. Here’s what you need to know about agency fees, industry trends, and new rules impacting both sides of the hiring equation.
How Employment Agency Fees Work in Australia
Employment agencies act as intermediaries between employers and candidates, providing recruitment, screening, and placement services. Their fees are typically structured in one of three ways:
- Contingency fees: Charged only if a candidate is successfully placed, often a percentage of the candidate’s first-year salary.
- Retainer fees: Paid upfront by employers to engage the agency’s exclusive search services, regardless of the outcome.
- Temp and contract staffing fees: Agencies mark up hourly or daily rates when providing temporary or contract staff, covering payroll, superannuation, and other on-costs.
For permanent placements in 2025, typical contingency fees range from 15% to 25% of the annual salary, depending on seniority and industry. Tech, healthcare, and executive roles often attract higher rates due to talent shortages and specialised expertise.
Recent Changes and Regulations in 2025
This year has seen several noteworthy policy updates and industry shifts:
- Transparency Rules: The Fair Work Ombudsman now requires clearer disclosure of fee structures in agency contracts, aiming to reduce disputes and hidden charges.
- Candidate Fee Bans: As in previous years, it remains illegal for agencies to charge job seekers for standard recruitment or placement services. Some exceptions apply for value-added career coaching or upskilling programs, but these must be clearly separated from job placement.
- Increased Competition: Digital-first agencies and AI-driven recruitment platforms are putting downward pressure on traditional fee percentages, especially for junior and mid-level placements.
- Temp Staffing Trends: With ongoing economic uncertainty, businesses are leaning into flexible, project-based hiring. Agencies have responded by offering more competitive margins and bundled workforce management solutions.
Employers are advised to review contracts closely and ensure all on-costs—including super, payroll tax, and insurance—are itemised. Meanwhile, job seekers should be wary of any agency demanding placement fees, as this is a clear red flag.
Real-World Examples: What Australians Are Paying in 2025
Let’s look at some real scenarios to illustrate current market dynamics:
- SME hiring an accountant in Melbourne: A boutique agency charges a 17% contingency fee on a $90,000 salary, resulting in a $15,300 placement fee. The contract includes a three-month replacement guarantee, in line with industry norms.
- Tech startup engaging a recruiter for a software developer: With tech talent still in short supply, the agency’s fee is 22% of a $130,000 package, or $28,600. However, the startup negotiates a staggered payment plan tied to the employee’s tenure, reflecting a trend toward risk-sharing arrangements.
- Hospital seeking casual nurses through a temp agency: The agency provides nurses at $60/hour, while the base wage is $40/hour. The $20/hour markup covers all statutory on-costs, agency profit, and administrative overhead.
New regulatory scrutiny in 2025 means agencies must provide detailed breakdowns of such charges, and employers are increasingly benchmarking agency rates against industry databases and digital platforms.
How to Minimise Agency Fees Without Sacrificing Quality
Employers looking to optimise their recruitment spend in 2025 can consider:
- Comparing multiple agencies and requesting transparent, itemised proposals.
- Negotiating volume discounts or bundled services if hiring for several roles.
- Exploring digital talent marketplaces for non-executive roles, where fees can be as low as 10-12%.
- Reviewing agency performance regularly, including candidate retention rates and satisfaction feedback.
For job seekers, steer clear of any agency promising ‘guaranteed’ jobs for a fee, and prioritise agencies with robust support, clear communication, and a strong track record in your industry.
