How insurance brokers get paid in Australia — and what actually lands on your bill
"What does insurance cost" is really two separate questions bundled together — what the broker is paid for arranging it, and what state and federal taxes get added to the premium regardless of who arranges it. It's worth separating the two, because they get confused constantly and they come from entirely different places.
Broker remuneration in general insurance is most commonly a commission, paid by the insurer as a percentage of the base premium rather than a direct charge to the client. Reported ranges vary across industry sources, but commonly cited figures put it somewhere around 10% to 25% of the base premium, with some sources describing an even wider practical span — from close to 0% on certain net-rated policies up to around 30% — depending on the insurer, the type of insurance, and how the business is placed. The alternative structure is fee-for-service, where the broker charges you directly, sometimes instead of commission and sometimes alongside a reduced or rebated commission. A fee-for-service arrangement should be set out in a written quote that you sign before it is charged, not simply mentioned in passing.
Disclosure obligations exist around all of this. Beyond general Corporations Act requirements, the Insurance Brokers Code of Practice, administered by the National Insurance Brokers Association (NIBA), sets additional standards for broker conduct. The Code is currently being substantially rewritten — the redrafted version went out for public consultation with feedback closing in August 2026, and NIBA is targeting a 1 January 2027 launch for the updated Code — and one of the changes broadly supported through that process is extending remuneration disclosure to all retail clients rather than only where it currently applies. Whatever the current rules say, it's entirely reasonable to ask a broker directly for the actual dollar figure or percentage being earned on your specific policy, rather than a general description of "how brokers are usually paid."
The other side of the bill has nothing to do with the broker at all: taxes layered on top of the base premium, which apply no matter who arranges the policy. GST at 10% applies nationally, and state insurance stamp duty typically adds a further roughly 9% to 11% in most states, with the ACT the notable exception, charging GST only. New South Wales stands out as a genuine outlier: it and Tasmania are the only jurisdictions that also apply an Emergency Services Levy (ESL) directly on insurance premiums to help fund fire and emergency services, and the ESL has been reported to add up to around 18% to a typical household premium — and up to around 34% on some business premiums — before GST and stamp duty are even applied on top of that. The levy has reportedly increased substantially in recent years, which is part of why the NSW Government has committed to reforming or replacing it. If a NSW quote looks unexpectedly high next to a similar interstate policy, this stacked state tax structure is very often the reason, not the broker's own remuneration.
This article is general information only. It does not take into account your personal circumstances and is not a recommendation to buy, hold, cancel or switch any insurance product. Before engaging an insurance broker or agency, you can check whether the business holds a current Australian Financial Services Licence, or whether an individual is an authorised representative of one, on ASIC's professional registers at asic.gov.au — general insurance is generally not covered by moneysmart.gov.au's Financial Advisers Register, which applies to personal financial advice. If you have an unresolved dispute with an insurer or broker, the Australian Financial Complaints Authority (AFCA) provides a free external dispute resolution service at afca.org.au. Our directory lists insurance brokers, insurance agencies and life insurance specialists across Australia by area if you are ready to start comparing your options.
Frequently asked questions
Commission is paid by the insurer, commonly cited in the roughly 10% to 25% range of the base premium, though reported figures can run from close to 0% up to around 30% depending on the insurer and product. Ask directly for the figure that applies to your specific policy.
Fee-for-service is a charge the broker makes to you directly, used instead of or alongside a reduced or rebated commission from the insurer. It should be set out in a written quote you sign before it is charged.
NSW and Tasmania are the only jurisdictions that apply an Emergency Services Levy on top of GST and stamp duty. In NSW the ESL has been reported to add up to around 18% to a household premium before GST and stamp duty are applied, which is a state tax, not a broker fee.
Not necessarily. Most brokers are paid by commission from the insurer, built into the premium, rather than a separate client charge. Ask directly whether a fee-for-service component also applies, and get it confirmed in writing.