Fixed-fee valuations of labour hire and on-hire staffing businesses, with licensing risk priced in.

A labour hire business is valued on the maintainable margin between what hosts pay and what workers cost, after wages, superannuation, payroll tax and workers compensation, and on how secure that margin is. Host concentration, contract terms, compliance history and the state labour hire licences the business holds all move the value, because a licence problem can stop the income altogether. Agency Valuations prepares an independent written report at a fixed fee: $1,495 + GST for businesses turning over under $2 million, delivered in 2 business days.

How is a labour hire business valued?

We value most labour hire and on-hire businesses on capitalised maintainable earnings. Turnover tells you little, because most of it is wages passing through. What matters is the margin per hour or per worker after award or agreement wages, superannuation, payroll tax, workers compensation premiums, insurance and any accommodation or transport provided.

The accounts are adjusted to what a new owner could expect to keep: the owner's pay is reset to a market wage, one-off contracts are separated out, and seasonal swings are averaged over enough years to be fair. The capitalisation rate reflects host concentration, contract terms and regulatory risk.

Which states license labour hire providers?

Licensing rules come from state and territory law and change often, so the valuation records each licence the business holds and its conditions. The main schemes, as described by their regulators:

• ·Victoria: providers must be licensed and hosts must use licensed providers. From 1 June 2026 people who control or substantially influence a provider, which can include a shareholder or investor, face a stronger fit and proper test, and providers must declare that they are financially viable.
• ·Queensland: every provider supplying workers in Queensland needs a licence, including providers based interstate or overseas. Licensees must be fit and proper, financially viable and comply with relevant laws, and must declare certain changes within 14 days.
• ·South Australia: licensing was extended to all industries from 29 January 2026, and from 29 July 2026 penalties apply to unlicensed providers and to anyone who engages them.
• ·Australian Capital Territory: a person must not provide labour hire services without a licence, licences are issued for no more than 12 months unless a regulation allows longer, and the suitability test extends to people who can significantly influence a corporate licensee.

What transfers when a labour hire business is sold?

A licence is held by the business entity; it is not a saleable asset on its own. On a share sale the company keeps its licences, but the incoming owners and directors come within the regulator's fit and proper checks, and some changes must be reported. On an asset sale the buyer is a different entity, so it needs its own licence in each state before it supplies a single worker, and hosts cannot lawfully use it until it does.

Employees who move to a buyer fall under the transfer of business rules, which affect the service and leave the buyer must recognise. The valuation does not assume a licence will continue unless the evidence supports it, and it notes any condition, renewal date or regulator inquiry a buyer would need to resolve.

What moves a labour hire business's value up or down?

• ·Host concentration: the share of gross margin from the largest host, and the term, notice and rate review clauses in its contract.
• ·Margin quality: margin per hour after all on-costs, and whether charge rates have kept pace with award and agreement increases.
• ·Compliance history: underpayment claims, licence conditions or suspensions, safety incidents and the workers compensation claims record.
• ·Payroll tax: whether it has been calculated and paid correctly, because a past shortfall stays with the company on a share sale.
• ·Worker pool: how many workers are on assignment, how long they stay, and how much depends on accommodation or transport the business provides.
• ·Working capital: workers are paid weekly while hosts pay on terms, so debtor days and finance facilities matter.
• ·Key people: whether host relationships and day-to-day compliance sit with the owner alone or with a team.

How do same job, same pay orders affect margins?

Under regulated labour hire arrangement orders, a labour hire employee cannot be paid less than they would receive working directly for the host. An order cannot be made where the host is a small business employer, and the protected rate generally follows the host's enterprise agreement or other workplace instrument.

The valuation question is commercial: which hosts have, or could face, an order, and can the business pass the higher pay through in its charge rates? A rate review clause protects the margin; a fixed rate with a large host on a generous enterprise agreement puts it at risk.

When do labour hire owners need a valuation?

• ·Selling the business, or testing an offer from a competitor or a larger group.
• ·Buying a labour hire business or a group of host contracts.
• ·A partner or shareholder exit under your shareholders agreement.
• ·Restructures and related-party transfers, where tax law looks to market value.
• ·Small business CGT concessions, where market value is needed for the asset threshold tests.
• ·CGT reform: from 1 July 2027 the 50% CGT discount for individuals, trusts and partnerships is replaced by cost base indexation and a 30% minimum tax for gains accruing after that date, so a valuation at 30 June 2027 may be useful.
• ·A dispute between owners, where an expert report is needed.

What do we need from you?

• ·Financial statements for the last three years and year-to-date management accounts.
• ·Gross margin by host for three years, with hours supplied and charge rates.
• ·Host contracts, including term, notice, rate review and exclusivity clauses.
• ·Labour hire licences for each state, their conditions and expiry dates, and any regulator correspondence.
• ·Payroll tax returns, workers compensation premium notices and claims history.
• ·Debtor ageing and any invoice finance facility.
• ·Owner salaries, personal costs run through the business, and your shareholders agreement.

How much does a labour hire business valuation cost?

Fees are fixed and set by your business's total annual turnover, excluding GST. A Small Business Valuation is $1,495 + GST for turnover under $2 million, delivered in 2 business days. A Medium Business Valuation is $2,495 + GST for $2 million to $3 million, and a Large Business Valuation is $3,495 + GST for over $3 million to $10 million, each delivered in 3 business days. Above $10 million the fee is quoted in writing before work starts, with the delivery date agreed before commencement. An expert report for a dispute or court is $4,495 + GST, with the delivery date agreed before commencement. Each extra past valuation date is $495 and each additional entity is $795. Delivery time starts once payment and all required information have been received.

Every report follows the guidelines of APES 225 Valuation Services and is signed by a suitably qualified business valuer. We value businesses; we do not broker or sell them.