Insourcing contractor payroll might look like a smart move for your recruitment agency. After all, you already run payroll for your own staff, right?
But the reality is often the opposite. Any perceived savings quickly disappear once you account for the multitude of hidden costs and complexities. This includes not just system fees and compliance risks, but the massive financial burden of credit management and funding.
When you insource, you take on the risk of covering contractor pay before client funds arrive, managing the effort and expertise required to chase slow invoices (when typically only 48% are paid on time), and exposing your agency to credit risk. This means absorbing system and processing costs , compliance risk , the time and resources lost to admin , and major hidden liabilities
Managing contractor payroll internally involves a maze of tasks. Every single worker needs meticulous handling of timesheets, invoices, and payments. The work continues with onboarding, offboarding, contract changes, and constant payroll questions, emails and calls.
Managing contractor payroll internally involves a maze of tasks and responsibilities.
For just one worker over eight months, you could handle 32 timesheets, 16 invoices, 32 payments, 10 phone calls, 20 emails, and 12 hours of total admin
Time spent on these tasks is time not spent growing your business.
Compliance is a major pitfall when insourcing. Keeping up with ever-changing ATO, Fair Work, payroll tax, and WHS laws requires both expertise and constant attention. Small errors, even unintentional ones, can lead to big fines and reputational damage.
The complexity extends to checking every worker’s right to work, validating visas, and maintaining current insurances. The Australian workforce laws are complex and unforgiving. By insourcing, you take on sole responsibility for navigating it. The risk of non-compliance is a heavy burden on your agency’s operations.
Running internal payroll also exposes your agency to financial and operational risks. You must manage cash flow carefully to cover contractor payments before client funds arrive. This means navigating client invoice systems, managing purchase orders, payroll funding costs, and credit risk.
Crucially, this means becoming a credit expert:
These financial pressures divert valuable resources away from business growth.
When you insource contractor payroll, your agency becomes fully responsible for workers’ compensation management. This includes wage declarations, premium renewals, incident response, and return-to-work programs. Without a dedicated WHS framework, compliance gaps expose your business to unnecessary risk.
Managing workplace safety and insurance requires robust systems and documentation. Any slip-ups in these areas can lead to costly incidents and legal liabilities. These hidden responsibilities significantly complicate insourcing contractor payroll.
Given the challenges and hidden costs of insourcing, partnering with Oncore is a game-changer. Oncore specialises in managing payroll, compliance, onboarding, and other administrative tasks, allowing you to focus on your core job: growing your business.
By outsourcing to Oncore, you can scale your contractor book without the administrative burden.
Compliance: They ensure compliance with all relevant laws, reducing your legal risks.
Cash Flow: They handle payroll funding, ensuring payments are on time, every time, even with late-paying clients.
Safety & Insurance: They manage insurances, offering WHS inductions, education, and support for workers involved in incidents.
Oncore’s services streamline operations and future-proof your agency with smart, compliant solutions. They collect funds for you and remit your margin directly to your bank account, ensuring steady revenue.
Partnering with Oncore lets you manage contractor payroll with confidence, guaranteeing compliance and efficiency while boosting your agency’s recurring revenue.