Most Australian business brokers charge between 5% and 10% of the sale price, and almost all of them attach a minimum commission that quietly overrides the percentage on smaller deals. If your business is worth less than about $400,000, the percentage in the agreement is probably not the rate you will pay. The minimum is.
That gap is where owners get caught. Here is what the fee is made of, what each part is worth, and how to work out your real cost before you sign an agency agreement.
How much does a business broker cost in Australia?
Business brokers in Australia typically charge 8% to 10% commission on businesses under $1 million, 5% to 8% between $1 million and $5 million, and 3% to 5% above that, with minimum commissions commonly set between $15,000 and $30,000. Upfront engagement and marketing fees usually add $2,000 to $5,000. All fees attract GST.
The rate falls as the deal gets bigger because the work does not scale with the price. Selling a $3 million engineering business takes more skill than selling a $300,000 café, but it does not take ten times the hours. Brokers price for the hours, then express it as a percentage.
The five layers of a broker’s fee
Read any agency agreement and you will find some combination of these. The number of layers matters more than the headline rate.
1. The success commission. The percentage of the final sale price, paid at settlement. This is the main event and the only part that is genuinely performance-based. Everything else gets paid whether or not your business sells.
2. The minimum commission. A floor. If the percentage calculates to less than the floor, you pay the floor. Covered in detail below, because this is the single most expensive clause for small businesses.
3. The engagement or listing fee. Paid upfront to start work. Brokers justify it as a commitment filter, and there is something to that: an owner who will not pay $3,000 to list often will not sign a contract either. Ask whether it is credited against the final commission. A credited engagement fee is a cash flow question. An uncredited one is a straight cost.
4. The marketing fee. Pays for listings on Seek Business, Bsale, Commercial Real Estate and the broker’s own database campaign. Usually $2,000 to $5,000, sometimes bundled into the engagement fee, sometimes billed separately at cost.
5. Everything after the handshake. Some agreements charge for extras once a buyer is found: contract preparation, extended settlement support, or a re-listing fee if the first buyer’s finance falls through. These rarely appear in the pitch.
Ask for the fee schedule as a single page with every dollar figure on it, including the ones that only apply if the sale fails. A broker who will not produce that page in writing has told you something useful.
What is a minimum commission, and why does it matter most under $500,000?
A minimum commission is the lowest dollar amount a broker will accept on a sale, regardless of the percentage agreed. On a business selling for $200,000 with a 10% rate and a $25,000 minimum, the percentage calculates to $20,000 but the minimum applies, so the seller pays $25,000. That is an effective rate of 12.5%.
The minimum bites hardest exactly where owners have the least room to absorb it. Work out your effective rate before you sign:
Effective rate = (commission payable + uncredited upfront fees) ÷ expected sale price
Run it at the price you expect, not the price you hope for. Then run it again 20% lower, because that is roughly where negotiated sales land against the asking price on a lot of small listings.
| Expected sale price | Typical headline rate | Typical minimum | You actually pay | Effective rate |
|---|---|---|---|---|
| $150,000 | 10% | $15,000 | $15,000 | 10.0% |
| $200,000 | 10% | $25,000 | $25,000 | 12.5% |
| $400,000 | 8% | $25,000 | $32,000 | 8.0% |
| $750,000 | 8% | $20,000 | $60,000 | 8.0% |
| $1,500,000 | 6% | n/a | $90,000 | 6.0% |
| $3,000,000 | 5% scaled | n/a | $120,000 | 4.0% |
Two things fall out of that table. Below roughly $300,000 the minimum is your real price, so negotiating the percentage is wasted effort and negotiating the minimum is not. And above $1 million the scale structure matters more than the top-line rate, because a broker quoting “5%” on a tiered scale may be charging 5% on the first million and 3% on everything after it, which lands well under 5% overall. Ask which one you are being quoted.
The low-fee and hybrid models now operating nationally quote around 4% with minimums closer to $4,000. They are genuinely cheaper on paper. What you are giving up is usually buyer-side work: qualifying enquiries, holding a nervous buyer together through finance, and managing the seller’s side of due diligence. If you are confident handling those, the saving is real. If you are not, a stalled deal costs more than the fee difference.
What are you paying the commission for?
Brokers are not paid for access to a listing site. You can buy that yourself for a few hundred dollars. The fee buys four things that are hard to do alone.
Confidentiality. A broker markets the business without naming it, screens enquiries under NDA, and keeps your staff, customers and suppliers from finding out that you are selling. Owners who market privately almost always get found out, and the damage is not recoverable.
Buyer qualification. Most enquiries on a business listing are not buyers. They are competitors, tyre-kickers, and people who cannot fund the deposit. Filtering that is a week of someone’s life per month, and it is the work most private sellers underestimate.
Price defence. The buyer will find every problem in your business during due diligence and try to reprice off it. A broker who has been through that forty times knows which discoveries justify a price cut and which ones are a negotiating tactic. This is where a good broker earns their whole fee back.
Getting to settlement. A signed contract is not a sale. Landlord consent, finance approval, licence transfers and franchisor approval all have to line up, and any one of them can kill the deal quietly while everyone assumes someone else is chasing it.
Are business broker fees tax deductible in Australia?
Business broker commission is generally not an immediate tax deduction. It is treated as a cost of disposal and added to the cost base of the asset you are selling, which reduces your capital gain and therefore the capital gains tax payable. The GST charged on the commission is usually claimable as an input tax credit if you are registered for GST. Confirm the treatment with your accountant before settlement, since it depends on your structure and on which small business CGT concessions you qualify for.
The practical effect is that the fee stings less than the invoice suggests, but you feel it later rather than at settlement. Owners who plan their cash position around a deduction that does not arrive get an unpleasant surprise at tax time.
Do brokers have to be licensed in Australia?
Yes, in every state and territory. Business broking sits under real estate agency legislation, so a broker selling your business generally needs a real estate or business agent’s licence: the Property and Stock Agents Act 2002 in NSW, the Estate Agents Act in Victoria, the Property Occupations Act in Queensland, and the Real Estate and Business Agents Act 1978 in Western Australia.
Licensing is the floor, not a quality signal. The useful additional check is membership of the Australian Institute of Business Brokers, which sets professional standards and runs the training pathway most career brokers come through. Ask for the licence number, then check it on the state regulator’s public register. It takes two minutes and it is the cheapest piece of due diligence you will do.
Five questions that reveal the real cost before you sign
Ask these in writing, and keep the answers.
1. What is the minimum commission, and at what sale price does it stop applying? This one number tells you your effective rate. If they will not name it, there is a reason.
2. Are the engagement and marketing fees credited against the commission? Credited means you are paying early rather than paying more.
3. Is the commission scaled, and if so, what are the tiers? “Five per cent” means two different numbers depending on the answer.
4. How long is the exclusive period, and what happens at the end of it? Six months is common and reasonable. Twelve months with automatic rollover is not. Check the tail clause too: most agreements entitle the broker to commission if you sell to a buyer they introduced, for a period after the agreement ends. That clause is fair. Its length is negotiable.
5. What do I pay if the business does not sell? Add up every uncredited fee. That is your downside, and it is the number most owners never calculate.
When the cheapest quote is the expensive one
The failure mode we see described most often is not an overcharging broker. It is an under-engaged one. An owner picks the lowest quote, the broker lists the business, the listing sits for nine months, enquiry quality is poor, and the owner eventually withdraws, having paid the upfront fees for nothing and burned the freshest set of financials they will ever have.
Price the broker on their last twelve months in your industry and your city, not on their percentage. A broker who sold six businesses like yours at 9% is cheaper than one who has sold none at 4%, because the second one is not going to sell it at all. Ask both of them for the number of listings taken and the number settled in the last year. The ratio is the answer.
Set a shortlist of three brokers, get the full fee schedule from each in writing, calculate the effective rate on each at your realistic sale price, and hold the conversation about value only after those three numbers are on the same page. If you want a starting shortlist, compare brokers by city and industry and take the first meeting with a number already in your head.