Agency Business Calculator

Understand how agencies structure rates and compare the three main contractor engagement models to see which gives you the best take-home pay.

Working through a recruitment agency in Australia? The engagement model you choose — PAYG employee, PTY LTD sub-contractor, or payroll company — has a significant impact on your take-home pay. This calculator lets you compare all three models side by side, factoring in agency margins, GST, superannuation, tax and fees so you can make an informed decision.

Agency Business Structure

Configure the agency rates and margins to see how money flows from client to contractor

Client Company

$ per day
Including GST: $1,320
↓

Agency

%
Gross Income: $1,200
Margin Amount: $300
Buy Rate (exc GST): $900
↓

Contractor Models

Choose your engagement model below

PAYG Employee

Traditional employee arrangement

Gross Arrangements

Buy Rate $900
LAFHA
$
Extra Fees
%
Gross Before Super $900

Superannuation

Super Rate
%
Super Amount $108
Net After Super $792

Tax Deductions

Income Tax
$
HECS
$
Medicare Levy
$
Total PAYG Tax $290
Take Home Pay $502

PTY LTD Sub Contractor

Company-to-company arrangement

Invoice & GST

Buy Rate Invoice (inc GST) $990
GST Provision $90
Revenue (exc GST) $900

Business Provisions

Business Costs
$
Gross Before Provisions $808

Superannuation

Super Provision
$
Net After Super $713

Tax Provision

Tax Provision
$
Take Home Pay $513

Payroll Company

Third-party payroll service

Invoice & Fees

Buy Rate Invoice (inc GST) $990
GST Provision $90
Payroll Fee
%
Payroll Fee Amount $17.55
Payment Advance Fee
%
Advance Fee Amount $4.50
Gross Before Super $878

Superannuation

Super Rate
%
Super Amount $105
Net After Super $773

PAYG Tax

PAYG Tax
$
Take Home Pay $498

Take Home Pay Comparison

Compare the net benefits of each engagement model

PAYG Employee

$502
Pros: Simple, agency handles all compliance
Cons: Highest tax burden, limited deductions

PTY LTD

$513
Pros: Best take-home, tax flexibility
Cons: Complex compliance, business risk

Payroll Company

$498
Pros: Salary packaging, some tax benefits
Cons: Fees reduce take-home, compliance risk

Key Insights

  • PTY LTD offers the highest take-home pay at $513/day
  • PAYG is simplest but lowest net income due to tax implications
  • Payroll companies suitable for Canberra market and salary packaging needs
  • Consider compliance complexity vs financial benefits when choosing

Frequently Asked Questions

What is the difference between PAYG, PTY LTD and Payroll Company contractor models?

PAYG means the agency employs you directly and handles all tax and super — it is the simplest but often yields the lowest take-home pay. PTY LTD means you operate your own company and invoice the agency — offering the most tax flexibility but requiring full business compliance. Payroll Company is a third-party intermediary that pays you as an employee while invoicing the agency — offering some tax benefits with less admin than PTY LTD.

What is a typical agency margin in Australia?

Agency margins in Australia typically range from 15% to 30% of the sell rate to the client. A 20-25% margin is common for IT and professional services contractors. The margin covers the agency's recruitment costs, account management, payroll processing, and profit.

How does GST work for contractors through an agency?

If you operate through a PTY LTD company, you charge GST (10%) on your invoices to the agency. You then remit this GST to the ATO, offset by any GST credits on business expenses. PAYG employees do not deal with GST directly as the agency handles it. Payroll companies typically include GST in their invoicing structure.

Which contractor engagement model gives the best take-home pay?

PTY LTD sub-contracting typically offers the highest take-home pay because you can claim business deductions, structure salary and dividends tax-efficiently, and control your superannuation contributions. However, it also carries the most compliance obligations and business risk.

What is LAFHA and how does it affect contractor pay?

LAFHA (Living Away From Home Allowance) is a tax-free benefit available to contractors who maintain a home elsewhere and live away for work. It can significantly increase take-home pay by covering accommodation and food costs tax-free, but strict ATO eligibility rules apply.

How It Works

1

Set Agency Rates

Input the sell rate to client and agency margin to see the financial structure.

2

Compare Models

See how PAYG, PTY LTD, and Payroll Company arrangements affect your take-home pay.

3

Make Informed Decisions

Compare the pros and cons of each engagement model for your situation.

Agency Engagement Models Guide

Learn about the different ways to work with agencies and which model suits your situation best.

Read Our Guides →