A debt collection agency contracted by the Department of Human Services under its controversial "robo-debt" program was paid on a commission basis used by private companies and had KPIs, a Senate inquiry has heard.

Probe Group chief operating officer Jarrod Kagan told a Sydney hearing of the inquiry into the "robo-debt" system his company was paid commission where it received a percentage of the debts it recovered for Centrelink, but no base rate.

The payment arrangement was different to that used by another agency engaging Probe to collect payments, the Australian Taxation Office, which used a flat payment rate.

Mr Kagan said the DHS' payment arrangement was typical of that used for debt collection services by banks, energy retailers and telcos.