Commercial debt collection commission usually sits between 10% and 30% of the amount recovered. Smaller and older debts fall at the higher end, larger and fresher debts at the lower end. Most agencies, including us, work on no collection no fee for standard commercial files.
How the commission model works
Written by James Woods, Managing Director
Written by James Woods, Managing Director
At a glance
How debt collection commission is calculated
Typical debt collection fees in Australia
What no collection, no fee covers
When legal and court costs apply
Whether collection costs can be charged to the debtor
What to ask before choosing an agency
How much unpaid debt can really cost your business
Table of Contents
Commission is charged on what comes back, not what's owed. Place a $10,000 invoice, we collect $6,000, the fee is a percentage of the $6,000. Smaller and older debts sit at the higher end of the band because they take more work to move. Larger or fresher debts sit lower. Volume matters too. If you're placing files regularly, the rate comes down.
As a rough guide for commercial debt collection pricing in practice:
The WA Government's Debt Recovery Services CUADRS2023 guide backs the pattern. Its published rates are treated as maximums that state agencies can negotiate lower based on debt value or volume. That's how the wider market prices too.
What no collection, no fee actually covers
On a standard file, no collection no fee means we wear the cost of the letters, phone contact and skip tracing if the debt doesn't come back. You don't pay a commission because there's nothing to take a commission from. That's the deal, and it's the standard debt recovery service scope we work to.
Disbursements are what sits outside the contingency. Court filing fees, process server costs and any external legal work aren't part of the commission. They're charged at cost, with your approval before they're incurred.
Some agencies advertise no win no fee then add setup fees, file opening fees or admin charges on top. Read the engagement letter closely. The ACCC/ASIC Debt Collection Guideline explicitly warns collectors against representing that fees will apply where there's no legal or contractual right to charge them.
Can I charge collection costs to the debtor
Sometimes. It depends on what your contract or terms of trade say. If your terms include a clause allowing recovery of collection costs and legal costs on an indemnity basis, we can pursue those costs alongside the principal debt. If the clause isn't there, you generally can't just tack them on and expect them to stick.
A few things worth knowing. In WA, the Debt Collectors Licensing Regulations 1964 (reg 13) limit what a collector can recover from a debtor on an instalment plan to either 50 cents or 2.5% of the debt, whichever is greater. The ACCC/ASIC guideline also cites a case study where a company falsely told debtors a court would order an extra 20% charge for late payment, which was treated as misleading.
The safe move is to get your terms of trade right before you need them.
This is general information, not legal advice. Your contract and state regulations decide the outcome in your case.
Legal costs when a debt has to go to court
Most files don't get here. When they do, the cost stack changes. A formal letter of demand from a solicitor is usually a low fixed fee. If you're not there yet, our letter of demand template is a reasonable first step on your own.
If it needs filing, the current NSW Local Court civil fees from 1 July 2026 are:
Small Claims Division originating process: $179 standard, $358 corporation
General Division originating process: $370 standard, $740 corporation
For insolvency work, the Federal Court's Schedule 3 costs applying from 11 June 2026 set the short-form amount claimable by a plaintiff on a Corporations Act winding-up order or dismissal at $5,203, and the short-form amount for an applicant on a Bankruptcy Act sequestration order at $3,344.
Here's where structure matters. Most agencies brief court work out to an external solicitor. That second law firm's file open, correspondence and mark-up sit on top of the court fee. E C Legal is our in-house litigation lawyers, so the file doesn't leave the building. That compresses time and cost on files that need enforcement.
The cost of leaving a debt unpaid
The counterweight to any fee is what the write-off costs you. If your net margin is 15%, a $10,000 loss costs the business roughly $67,000 in replacement sales just to get back to even.
Time works against you too. The older a debt gets, the lower the recovery rate, and the higher the chance the debtor's position changes. ASIC's 2026 review of voluntary administration and DOCA outcomes found 5,020 companies entered voluntary administration between 1 July 2021 and 30 June 2025, with $71 billion in total liabilities and median liabilities of $2.3 million per appointment. Almost 90% of wholly effectuated DOCAs paid a dividend to unsecured creditors, but the average was 21 cents in the dollar and the median just 11.5 cents.
Put simply, if your debtor becomes insolvent while you wait, you're looking at pennies. That's why we usually suggest not delaying debt action once an account is 60 days past due.
What to ask before you place a debt
If you're comparing agencies, ask them to answer these plainly:
What are your commission bands by debt value and by debt age?
What's inside the no collection no fee arrangement, and what sits outside?
Are there any fixed fees, admin fees or file opening charges?
Who does the legal work if it goes to court, and what does that add?
Are you ISO 9001 certified, an AFCA member and appropriately licensed in each state?
Can you provide current client references or published testimonials?
The small business debt collection pricing questions are the same as they are for larger placements. If any answer is vague, get it in writing before you sign.
Get a free appraisal on your debt
If you want a real percentage for your specific debt rather than a range, send us the details through our free
Debt Terminator appraisal. We'll tell you what we'd charge, what we think we can recover and what the next step looks like. No obligation to place the file.
FAQs
No collection no fee, or no win no fee, means you pay a commission only if the agency actually recovers money. If nothing comes in, you don't pay for the letters, calls or skip tracing. Court filing fees and other disbursements sit outside the arrangement and are charged separately.
Only if your contract or terms of trade include a clause allowing recovery of collection and legal costs, usually on an indemnity basis. Without that clause, you generally can't add these costs to the debtor's balance. Some state regulations, like WA's, cap what can be added on instalment recoveries.
Agencies charge a percentage of what's recovered, with no fee if nothing comes in. Lawyers charge hourly or by fixed stage regardless of outcome. For most straightforward commercial debts, an agency is cheaper. For complex or disputed matters, direct legal action can make more sense.
The common ones are file opening fees, admin fees, monthly reporting fees or disbursements charged without prior approval. Ask for a full fee schedule in writing before you place a debt. The ACCC/ASIC guideline is clear that agencies can't charge fees that aren't legally or contractually permitted.
The ACCC/ASIC Debt Collection Guideline sets national conduct standards, including rules on representing fees to debtors. State-based licensing regulations, like WA's Debt Collectors Licensing Regulations 1964, add specific limits in some situations. Court fees are set by each court's current fee schedule.
Free ASIC search fields cover ABN, ACN, ARBN or ARSN, registration date, next review date, registered-office suburb, state and postcode, and lodged documents. Paid extracts add officeholder details, share structure and history: current extract $10, current and historical $20, roles and relationships $23, certificate of registration $23. Residential addresses of officeholders aren't included.
No. Use a PPSR search to see which security interests are already registered against the business’s assets. A credit check tells you the business's payment history and adverse listings. Run both. A clean credit file does not cancel out broad PPSR registrations, but the registrations alone will not tell you how much debt remains or what equity is available in the assets.
Related reading
This article is general information only and is not legal advice. Your contract terms, state regulations and the facts of your matter will determine your position.
References
James Woods
Managing Director
James has operated businesses since his late teens including windsurfer hire (1977 – 1981), yacht charter (1990 – 2001), motor accident repairs (1984 – 1989) and debt recovery (2002 to the present). He holds a B.A. and LL.B. from Monash University and was admitted as a lawyer in 1983. He is also a Graduate of the Australian Institute of Company Directors.
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We make debt recovery simple, fast, and results-driven. Upload your files, track progress in real-time, and only pay when we collect.
Let’s recover your debts without the stress
We make debt recovery simple, fast, and results-driven. Upload your files, track progress in real-time, and only pay when we collect.
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