AUS & NZ: Does using an agency cost you?
It is illegal in both Australia and New Zealand to charge candidates a fee for recruitment placement or job-matching. It is a common misconception that recruiters "take a cut" of your salary. It is not true. The employer pays — and going through an agency does not reduce your pay.
It is illegal in both Australia and New Zealand to charge candidates or job seekers a fee for recruitment placement or job-matching services. In both nations, the cost of recruitment must be paid entirely by the hiring employer, not the person looking for work.
Australia
This practice is illegal under the federal Fair Work Act 2009 as well as various state and territory consumer protection and private employment agency laws.
New Zealand
Section 12A of the Wages Protection Act 1983 makes it illegal for an employer or their agent/recruiter to seek or receive any “employment premium” (a fee, bond, or payment) in exchange for placing someone in a job.
The “you earn less” lie
You do not earn less if you go through a recruitment agency. A very common misconception is that recruiters “take a cut” of your salary, but this is not how the system works.
The impact on your paycheck depends entirely on whether you are being placed into a permanent role or hired as a temporary/contract worker.
If an agency helps you land a permanent, ongoing job with an employer, your salary will be exactly the same as if you had applied directly.
Permanent roles
The hiring employer pays the recruiter a separate, one-off “finder's fee”.
These funds come out of the employer’s recruitment budget, not your paycheck. In fact, because recruiters are incentivised by a percentage-based commission, they will often try to negotiate a higher starting salary for you, as a higher salary increases their own payout.
Temporary, casual or contract roles
If you are hired for temporary or casual work, you are technically employed by the recruitment agency, and your services are “leased” to the client company.
The agency charges the client company an hourly rate. This rate covers your wage, compulsory government taxes/superannuation, and a profit margin for the agency.
You are legally protected by Modern Awards (in Australia) and employment laws (in New Zealand). Agencies must not pay you below the minimum legal award rate for your role.
Temp and casual agency workers earn a higher hourly rate than permanent staff doing the same job. This is because casual rates include a 25% loading fee to compensate for the lack of paid annual leave/sick leave and job security.
Recruiters know the market and they know what you are worth to employers. Registration assistance, contract negotiation, visa advice and preparation and relocation assistance are all part of Global Health Source's service and provide an end to end