A labour hire business in Australia typically sells for 2.5x to 5.5x normalised EBITDA. A well-run operation in Western Australia supplying workers to the resources sector, with $800,000 in annual earnings and clean licensing across its operating states, might realistically achieve $3.5M to $4.5M. A smaller, owner-operated business with one major client and a thin compliance record will be lucky to attract 2x. Revenue tells you almost nothing — because in labour hire, you can turn over $8 million a year and barely make $500,000 after wages, super, workers comp and payroll tax.
That gap between revenue and earnings is the defining feature of labour hire valuations. It catches owners off guard.
What Labour Hire Businesses Actually Sell For
Labour hire is a volume business with thin margins, and buyers know it. The earnings profile is structurally different from a services business, a trade contractor, or even a traditional recruitment agency. You carry the payroll — you pay your workers every week whether the client invoice has landed or not — and your margin is the difference between your charge rate and your on-costs.
Rule of thumb: well-run labour hire businesses with diversified client bases, current licences, and a management team sell for 4x to 5.5x EBITDA. Owner-operated businesses with one anchor client typically attract 2.5x to 3.5x.
| Business Type | Typical EBITDA Multiple |
|---|---|
| Single client, owner-managed, no licence history | 1.5x – 2.5x |
| Multi-client, mining or construction, state-licenced | 2.5x – 4x |
| Specialist sector (healthcare, engineering, resources FIFO) | 3.5x – 5.5x |
| Scaled business with management team and enterprise agreements | 4.5x – 6x |
The EBITDA range for staffing and labour hire businesses sits in the middle of Australia’s broader industry spectrum — above hospitality and retail trades, but below software or healthcare. The specific multiple depends heavily on factors unique to this industry.
The Compliance Factor That Buyers Price In First
If you operate in Victoria, Queensland, South Australia, or the ACT, your business must hold a current labour hire licence in each state where you supply workers. Buyers look at this immediately — before they look at your financials.
A licence with a clean compliance record signals low regulatory risk. A licence with prior breaches, infringement notices, or underpayment history signals the opposite. An unlicensed business in a licensing state is, bluntly, a liability the buyer is being asked to absorb.
I spoke with a business broker late last year who described a deal that fell apart at due diligence. The vendor had been operating across Victoria and Queensland for six years with a solid client base and reasonable earnings. The buyer’s lawyers found two underpayment incidents in the Victorian licence history — relatively minor, both resolved — and dropped their offer by 20%. The vendor walked rather than accept it. They eventually sold at a lower price to a less thorough buyer. (The moral here is not to find a less thorough buyer. It’s to clean up your record before you go to market.)
WA does not currently require a labour hire licence, which simplifies compliance for Perth-based operations. That said, if you supply workers across state borders into Victoria or Queensland — which many WA contractors do, particularly for FIFO roles — those licences apply the moment your workers step onto the site.
Compliance rule of thumb: a fully licenced, breach-free business will command 0.5x to 1x more on the EBITDA multiple than an equivalent business with open compliance risks.
Revenue vs. EBITDA — Why the Distinction Matters More Here
A $10 million revenue labour hire business might generate $600,000 to $1.2 million in normalised EBITDA. That’s an EBITDA margin of 6% to 12%. Most other service businesses at $10 million revenue would sit at 15% to 25% EBITDA margins.
Buyers are not paying for your revenue. They’re paying for your earnings. If you run your business at a 6% margin, a 4x multiple gets you $2.4M. Run the same revenue at 12% margin and that becomes $4.8M — the same turnover, twice the price.
This matters because many labour hire owners manage the business to revenue targets rather than margin targets. The habit makes sense operationally — you need volume to keep fixed overheads covered — but it obscures what the business is actually worth.
The normalised EBITDA calculation strips out owner’s salary above a market replacement cost, any personal expenses run through the business, and non-recurring items. This is covered in detail in the EBITDA add-backs guide. In labour hire, the common add-backs are: above-market owner drawings, vehicle packages, redundancy costs paid in the sale period, and one-off workers comp claims.
Mining and Resources Sector Labour Hire — A Different Market
Labour hire in the WA resources sector is a different animal from general commercial or industrial labour hire. The margins are higher, the relationships are stickier, and the buyer pool is different.
A Perth-based labour hire firm with enterprise agreements at two or three Pilbara mine sites, supplying FIFO workers for production and maintenance roles, will attract strategic interest from larger staffing groups and private equity. The contracted revenue profile is relatively predictable; the mine sites are hard to dislodge from once you’re embedded; and the barriers to entry — HSEC certification, site access approvals, EAs — create genuine competitive protection.
Mining labour hire rule of thumb: FIFO supply contracts with hard-rock mining clients typically add 0.5x to 1.5x to the multiple compared to equivalent general industrial labour hire.
That premium has limits. Mining sector labour hire is exposed to commodity price risk in a way that a Melbourne office temp agency is not. If your book is 80% exposure to one commodity and one project, buyers will model the downside scenario and it will show in their offer.
What Discounts Your Labour Hire Business’s Value
Client concentration is the most common discount factor. If one client represents more than 30% of your revenue, buyers will worry — correctly — that losing that client erodes most of the earnings they’re paying for. Diversifying across five or more active client relationships before you sell is worth considerably more than it costs.
Worker classification is the other sleeper. Businesses that have historically engaged workers as independent contractors rather than employees — especially in sectors like construction and labour hire — face a risk that the ATO or Fair Work Australia reclassifies those arrangements retrospectively. Buyers will probe for this and price in the exposure if they find it. If you’ve run ABN contractors in roles that look like employment, get specialist advice before you go to market and fix what you can.
Key person dependency remains a standard discount. In labour hire, this often means the owner holds all the client relationships personally — the operations manager can run the payroll, but the moment the owner steps back, the clients start looking for alternatives. Buyers pay less for this, and they’re right to.
Other discount factors:
- Workers compensation claims history above industry norms
- Award rate exposure (underpayments under modern awards, especially in retail and hospitality)
- High geographic concentration (operating only in one city or one sector)
- Outdated payroll and workforce management systems that create operational risk for a new owner
The Working Capital Conversation You’ll Have With Every Buyer
Labour hire has a structural working capital challenge: you pay your workers weekly, you invoice your clients monthly (or 30-day terms), and the gap is funded from your cash. A business with $10 million in annual revenue might carry $800,000 to $1.5 million in receivables at any point in time.
Buyers will negotiate a normalised working capital position at settlement — meaning they’ll calculate the average receivables balance required to run the business at current revenue levels, and any shortfall becomes a price adjustment. This is worth understanding before you get to heads of agreement, because it’s a real variable and it’s not always obvious to business owners.
Working capital adjustments are explained in detail here — worth reading if you haven’t dealt with this before.
Who Buys Labour Hire Businesses in Australia
The buyer pool for labour hire businesses is relatively specific. Trade buyers — larger staffing firms, recruitment groups, national labour hire operators — are the most common. They’re buying geographic coverage, sector specialisation, or client relationships they don’t currently have. Private equity-backed aggregators have also been active in this space, particularly looking for sector leaders with $1M+ EBITDA.
Independent buyers — individuals wanting to acquire an existing operation rather than start one — exist but are less common, partly because the compliance requirements (licensing, payroll infrastructure, workers comp management) create a meaningful learning curve.
The most strategic conversations happen when a buyer sees your client list and calculates what it would cost to win those accounts organically. If the answer is “years and significant capital,” they’ll pay a reasonable premium to skip that.
What To Do Before You Sell
The preparation that actually moves the price takes two to three years, not six months. The specific steps for a labour hire business:
- Get your compliance file in order. All licences current, all breach history documented and resolved, all worker classifications reviewed by a specialist employment lawyer.
- Reduce client concentration. If one client is more than 30% of revenue, build or win others before you sell. The multiple lift more than compensates for the effort.
- Build a management layer. Who handles operations, payroll disputes, and client relationships when you’re not there? If the answer is “nobody,” build the answer.
- Document your systems. Buyers need confidence that the business can operate after settlement. Payroll processing, SWMS templates, award interpretation, onboarding — write it down.
- Three years of clean financials. Buyers in labour hire want to see the earnings trend across a full business cycle, not just the peak year.
For a formal view of what your business is worth now, our valuation calculator gives you an indicative range based on normalised earnings and business quality factors. Or speak directly with us — Miro Capital has worked on labour hire transactions across the resources, construction, and commercial sectors in WA and nationally.
FAQ
How much does a labour hire licence cost?
Fees vary by state. Victoria charges $918 (small business) to $3,674 (large) for the initial application. Queensland uses a similar sliding scale. Licences must be renewed annually. Western Australia has no current licensing requirement. Operating in a licensing state without a licence exposes both the labour hire provider and the host employer to significant financial penalties.
How much is labour hire in Australia?
Labour hire rates to clients typically sit 30–50% above the applicable award or enterprise agreement wage rate. That margin covers superannuation, workers compensation insurance, payroll tax, leave loading, recruitment costs, and the agency’s operating margin. The agency’s EBITDA is what’s left after covering those costs and its own overheads.
Which states in Australia require a labour hire licence?
Victoria, Queensland, South Australia, and the ACT all require labour hire providers to hold a current licence. Western Australia and New South Wales do not have licensing schemes as of 2026. Licence requirements follow the location where work is performed — a Perth-based agency supplying workers to a Victorian site must hold a Victorian licence.
What does labour hire mean to the ATO?
The ATO treats labour hire arrangements specifically under the PAYG withholding rules. Labour hire companies must withhold tax from payments to workers, regardless of how those workers are engaged. The ATO also watches closely for sham contracting — arrangements where workers are engaged as ABN contractors but function economically as employees. Retrospective reclassification creates back-payment liability that buyers will heavily discount or walk away from.
How do I know if my labour hire business is ready to sell?
A business is sell-ready when it can operate without you for three months without losing a client or a key employee. If that’s not the case yet, the preparation work — building management depth, documenting systems, diversifying clients — will produce a better outcome than listing now and hoping. Most owners who get this right end up selling for materially more than their first estimate.
Miro Capital is a Perth-based corporate advisory firm that advises Australian business owners on preparing and executing business sales. If you’re thinking about selling your labour hire business, get in touch for an initial conversation.