The 2025–26 Australian Capital Territory (ACT) Budget spotlights payroll tax expansion, property levies, and public health funding. Staffing firms navigate a shifting financial terrain with rising wage costs, expanding tax obligations, and growing compliance risks. Thankfully, offshore recruitment services emerge as a strategic response. These offshoring solutions offer a way to preserve financial agility and streamline compliance in this new environment. This article explores why offshoring must be part of every staffing firm’s toolkit.
Decoding the ACT Budget: What Staffing Firms Need to Know
The ACT Budget brings several key changes:
- Payroll tax threshold cut to $1.75 million, effective July 2026.
- Tiered tax rates: 6.75% for $1.75m–$20m; up to 7.75% beyond $100m.
- A new $250 health levy on commercial properties and high-value residential sores.
These shifts pressure profitability, hiring strategies, and long-term workforce planning for growing and mid-sized staffing firms. They also demand creative payroll and operational restructuring.
The Domino Effect: Repercussions on Australian Staffing Businesses
When payroll costs escalate, margins tighten. Firms may slow headcount growth or restructure roles to remain below the higher-tax thresholds. Teams focus heavily on digitisation or trimming support functions to control costs. Those unable to adapt risk losing ground to leaner, tech-enhanced competitors.
The Strategic Pivot: Offshoring as a Budget Smart Solution
A. Keep Onshore Payroll Under $1.75M Threshold
Staffing firms can lower onshore payroll tax liabilities by offshoring administrative roles, IT support, candidate sourcing, and screening. Offshore recruitment services to reduce payroll tax allow firms to retain core functions domestically while optimising cost.
B. Avoid the Higher Payroll Tax Bands
Firms nearing the $20M mark can shift 15–30% of functions offshore to remain in the 6.75% band instead of jumping to 7.25% or 7.75%. A $500K payroll adjustment could yield thousands in annual savings.
C. No Payroll Tax or Super Obligations on Offshore Staff
Offshore arrangements structured as B2B eliminate onshore superannuation, leave, or fringe benefit liabilities. This simplifies compliance and minimises audit risk. Contract-based flexibility enhances financial predictability.
D. Zero Exposure to ACT Property Levies or Health Surcharges
Offshore delivery centres operate outside the ACT jurisdiction. Scaling offshore teams avoids triggering local levies, with no $250 per employee health charge or property surcharge. Growth remains lean and levy-free.
Offshore Recruitment Services: Cost Saving, And Value Driven
Offshore recruitment services offer more than tax relief. They deliver:
- Scalability
- 24/7 operations
- Access to multilingual talent
- Shorter time-to-hire
Onshore staff can shift focus to client-facing, higher-value functions. Offshore teams driven by performance metrics and compliance standards support strategic alignment and amplify business growth.
Why Australian Staffing Firms Are Shifting Now: A Rational Decision
Several Australian agencies have already diversified by adopting offshoring. Early movers are reinvesting savings into technology upgrades, marketing, and expansion. This is a rational, proactive step, not a reactive cost-cutting effort.
Recruitment outsourcing for Australian staffing firms is emerging as an intelligent approach. Firms leveraging this model report improved financial allocation and strategic resilience.
The IMS People Possible Perspective
IMS People Possible brings proven experience helping Australian staffing firms leverage offshore recruitment services. Our offerings include:
- End-to-end offshore recruitment: sourcing, screening, compliance, submission, etc.
- Dedicated teams in regions with the Australian time zone overlap.
- Flexible B2B contracts are carefully designed to avoid payroll tax exposure.
A consultation is available to evaluate how the ACT Budget impacts staffing firms and how strategic offshoring can balance growth and compliance.
Act Today: Embrace Offshore Recruitment Services
Staffing firms in the ACT face significant headwinds under the 2025–26 Budget. The path forward lies in intelligent offshoring. By leveraging offshore recruitment services, firms secure cost control, compliance simplicity, and strategic growth.
Contact IMS People Possible today to start your journey toward a more agile, future-ready staffing business.
