Bill rate, pay rate, burden rate — the gap between what a client pays and what a contractor receives, once superannuation, payroll tax, WorkCover, and leave provisions are actually accounted for.
Multiple AU advisory sources confirm agencies commonly miscalculate margin by comparing bill rate to pay rate alone, systematically overstating profitability by ignoring the burden. Layered on top: multi-state payroll tax thresholds (NSW $1.2M, VIC $900k, QLD $1.3M) that shift depending on where your contractors are placed.
The cash-flow mechanic, stated exactly: agencies fund contractor wages weekly or fortnightly, and often wait 30–60+ days for client payment — a structural liquidity strain built into the business model, not a working-capital inconvenience.
On the backlog: timesheet-to-invoice reconciliation, and true burdened per-placement/per-consultant margin reporting.
Connect your Xero account and see what it finds on your actual last close, not a demo.