By TNTSEO United | FIS Recruitment | Last updated: August 2026 Quick take. Employers generally encounter two pricing methods. Temporary and temp-to-hire work is billed as an hourly bill rate, which is the worker's pay rate plus a markup covering employer payroll taxes, workers compensation, unemployment, benefits where applicable, recruiting, and the agency's overhead and margin. Permanent placement is a one-time fee, normally a percentage of first-year base salary. In the models described here, the employer pays and the worker never does. This is the standard arrangement for reputable agencies. We are FIS Recruitment, and most clients see a qualified slate within 24 to 72 hours after intake. We quote per requisition rather than from a rate card, so send us the role, shift, and pay range and we can walk you through the bill-rate inputs and produce a quote for your specific requisition. 800.248.8687. The two ways employers pay staffing agencies Temporary and temp-to-hire work is billed hourly: bill rate equals pay rate plus a markup. Direct hire is a one-time placement fee, usually a percentage of the person's first-year base salary. Those are the two models most employers meet. Two points matter up front. The employer carries the cost in both models, and the worker never does. The American Staffing Association's own client materials describe the placement fee as negotiated between the client and the staffing firm, and reputable agencies do not charge candidates. The number that matters to you is the bill rate, not the markup percentage in isolation. A low markup on a high pay rate can cost more than a higher markup on a realistic one, and a markup percentage tells you nothing until you know what it is a percentage of. How staffing agency markup works The markup is not the agency's profit. It is the pool that pays every employment cost the agency carries as the employer of record, and only what is left at the end is margin. The formula is simple: bill rate = pay rate + markup. What sits inside the markup is where the money actually goes. Employer FICA. The employer share of Social Security and Medicare is 7.65 percent of wages, made up of 6.2 percent Social Security and 1.45 percent Medicare, per the IRS. Federal unemployment tax. FUTA is 6.0 percent on the first $7,000 of each employee's wages, and employers who pay into state unemployment funds generally receive a credit of up to 5.4 percent, which brings the effective rate down to 0.6 percent, per the IRS. State unemployment insurance. Claims and employment history influence an experience-rated contribution alongside state-set factors, so there is no single number. That difference reaches your bill rate. Workers compensation premium. Workers compensation premiums are priced by class code and state and are materially higher for warehouse and industrial work than for clerical work because the injury risk is different. Pennsylvania Department of Labor and Industry states that coverage is mandatory for employers with one or more employees, part-time or full-time. New York's Workers' Compensation Board states New York employers may be required to carry workers compensation, disability benefits, and Paid Family Leave coverage. Benefits and paid leave where the assignment or the jurisdiction requires them. Recruiting, screening, onboarding, invoicing, and replacement cost. This covers the work of finding, checking, and standing the person up, plus doing it again if the first placement does not work. Overhead and margin. What is left. A large share of the markup leaves the agency before it becomes profit. The table below shows how much. Where each dollar of a staffing agency bill rate goes Illustrative example, not a quote. The figures below are the American Staffing Association's own published worked example from its "Understanding Staffing Profit" fact sheet, dated May 2019. ASA uses a $17.00 national average hourly pay rate, drawn from its Staffing Employee Survey of nearly 12,000 temporary and contract workers, and shows that pay rate marked up by 51.5 percent to a $25.76 bill rate. The component percentages come from ASA's Staffing Operations Benchmarking Survey. Your numbers will differ, because the pay rate is a 2019 national average and the unemployment and workers compensation components vary by state and work type.

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