Contractor Payroll for Recruitment Agencies: Supporting Recruiters and Contractors

For a recruitment company, making a successful placement is only the beginning.

Once a contractor starts, there is onboarding, payroll, PAYG withholding, superannuation, timesheets, invoicing and ongoing contractor questions to manage. For recruitment consultants who want to spend their time finding great people and supporting clients, payroll administration can quickly become another workload sitting behind every placement.

That is where an outsourced contractor payroll partner can help.

At PayMe Australia, we work with recruitment companies to manage the payroll behind their contractor placements, while the recruitment company maintains the employment and client relationship. PayMe has supported Australian recruiters and contractors for around 20 years, with a service designed specifically around contract workers rather than high-volume, one-size-fits-all payroll.

What does PayMe handle for recruitment companies?

The process is designed to be simple.

Once a recruitment company sends us the contractor's placement details and contract, PayMe can generally have the contractor payroll-ready the same business day. The contractor completes their tax file declaration, super choice and bank details electronically, and our team takes care of the payroll administration from there.

For recruitment partners, this can include:

• contractor payroll processing
• PAYG withholding and reporting
• Same-day superannuation processing
• contractor onboarding
• payslips and payroll records
• flexible timesheet processing
• Fee-Free Novated Leasing
• salary packaging administration
• contractor payroll enquiries
• e-invoicing and RCTI options to reduce administrative requirements
• ongoing support when contracts are extended or contractors move between placements.

Instead of payroll questions continually coming back to the recruitment consultant, contractors have a PayMe payroll contact they can speak with directly.

That means recruiters can remain focused on recruitment, candidate relationships and clients while PayMe manages the payroll function behind the placement.

We work with the recruiter's existing process

Outsourcing payroll shouldn't mean rebuilding the way your recruitment business already operates.

PayMe can work with different timesheet arrangements depending on the recruiter and placement. Contractors may submit timesheets through PayMe, email them to us, or PayMe can process hours from information such as an RCTI supplied by the recruitment company.

We also offer e-invoicing and RCTI options that can help reduce manual administration for recruitment-company finance teams.

The aim is to fit into the recruiter's process rather than force the recruiter and contractor into ours.

Supporting the contractor reflects well on the recruiter

Payroll is often one of the most regular interactions a contractor has during a placement.

A smooth payroll experience can therefore become part of the overall contractor experience a recruitment company provides.

PayMe doesn't just process the wage and send a payslip. Contractors have access to payroll support and a range of services designed specifically around the way contractors work.

A real payroll contact

Every PayMe contractor has access to a payroll contact rather than being passed through a generic ticket queue.

If they have a question about their pay, timesheet, deduction, salary packaging or superannuation, they can speak with someone who understands their arrangement.

That means fewer payroll questions need to be redirected back through the recruitment consultant.

Superannuation paid with payroll

From 1 July 2026, Payday Super changed the timing of employer superannuation contributions across Australia.

Under the current rules, Super Guarantee is calculated at 12% of qualifying earnings and employers generally need contributions to reach an employee's super fund within seven business days of payday.

For PayMe contractors, superannuation is processed at the same time as their wage, with contributions generally reaching their nominated fund within seven business days.

Contractors can also choose to salary sacrifice additional amounts into super, subject to contribution caps and their individual circumstances.

For recruiters, it means super administration and the questions surrounding it are handled as part of the PayMe payroll service.

Fee-free novated leasing through Alliance Leasing

PayMe contractors can also access novated leasing through our sister company, Alliance Leasing.

There is no separate novated leasing management fee for PayMe Contractors. Once a lease is established, agreed vehicle finance and running-cost deductions are processed through the contractor's PayMe payroll.

For contractors considering an eligible electric vehicle, current Australian FBT concessions may also apply depending on the vehicle and arrangement.

Because eligibility and tax outcomes vary, contractors should always consider their own circumstances before entering into a lease.

Salary packaging for contractors

A contract rate isn't only about the headline hourly or daily number.

Eligible PayMe contractors can access salary sacrificing and salary packaging as part of the PayMe service.

Depending on their circumstances, eligible arrangements can include additional super contributions, certain work-related expenses and novated leasing.

Salary packaging is processed through payroll before PAYG withholding is calculated where the relevant rules allow it, meaning the contractor can make use of an agreed portion of their remuneration in a different way rather than simply receiving all of it as taxable cash salary.

For recruiters, having these options available can also help with rate conversations. A contractor may be able to make more effective use of an existing contract rate without the recruiter needing to increase the rate offered by the client.

BankIT for holidays and gaps between contracts

Contracting can offer flexibility, but contractors generally aren't being paid for hours they don't work.

That can become particularly noticeable during Christmas shutdowns, holidays or periods between placements.

BankIT allows PayMe contractors to set aside some of their own pay while they are working and have those funds paid back to them during a planned period away from work.

It isn't annual leave or an additional employment entitlement. It is simply a way for contractors to smooth their own income across periods when they know they will not be earning.

For recruiters, services like BankIT can help contractors prepare for the realities of contract work rather than being surprised by a reduced pay period during a shutdown.

Additional contractor benefits

PayMe contractors also have access to our Corporate Benefits Program, which includes discounts across areas such as gym memberships, airport lounges, technology retailers, health insurance and banking.

These services sit alongside the core payroll service rather than replacing it.

A contractor can simply use PayMe for reliable payroll, or they can explore the additional benefits and salary packaging options available to them.

What does PayMe charge?

PayMe's standard contractor payroll fee is 1.75% of the payment received from the recruitment company, with discounted arrangements available through some recruitment-company partnerships.

Eligible salary sacrificing and fee-free novated leasing are included within the PayMe service rather than attracting separate PayMe payroll charges.

PayMe also offers recruitment partners the opportunity to participate in partnership and referral arrangements, with additional benefits available as the relationship grows.

A payroll partner behind the placement

The best outsourced payroll relationship should make things easier for both sides of a placement.

For the recruitment company, that means less time spent administering payroll, onboarding, superannuation, timesheets and contractor questions.

For the contractor, it means reliable payroll, access to a real person when they need help, and options such as salary packaging, additional super, novated leasing, BankIT and contractor benefits.

The recruiter keeps doing what they do best: placing great people and building client relationships.

PayMe takes care of the payroll behind them.

If you're a recruitment company looking for an outsourced contractor payroll partner, talk to the PayMe team about your contractor volumes, current payroll process and the partnership options available.

General information only. Salary packaging, superannuation and novated leasing outcomes depend on individual circumstances. This article does not constitute taxation, financial or credit advice.