US · Margins
How much do staffing agencies charge clients?
Typical US staffing markups and permanent placement fees, with the difference between pay-rate markup and a defensible gross margin.
The short answer
US temporary staffing agencies often charge a markup of roughly 30 to 70 percent over pay, depending on the niche, risk and client volume; that is not the same as margin because employer burden sits inside the markup. Permanent recruitment commonly charges 15 to 25 percent of first-year salary. Price from burdened cost, not raw pay.
Key facts
- Temp staffing markup
- Roughly 30–70% over pay, niche dependent
- Perm placement fee
- Typically 15–25% of first-year salary
- Correct pricing base
- Fully burdened employment cost
- Commercial reality
- Volume, MSP fees and payment terms compress the headline rate
There is no universal staffing markup because the agency is selling more than hours. The price covers payroll administration, employer taxes, workers' compensation, recruiting, compliance, the risk of non-payment and the funding gap between pay and collection.
Start with fully burdened cost and work backwards from the gross margin you need. Quoting a multiple on raw pay makes different job classes look comparable when their workers' compensation and overtime exposure are not.
Client volume changes the answer. A direct mid-market account that pays in thirty days may support a higher rate than an MSP programme that takes a supplier fee, imposes capped markups and pays in seventy-five days.
Permanent fees follow a different model. The agency is paid for a successful introduction and carries rebate risk, not for a recurring hourly spread. Define salary, bonus, guarantee and payment timing in the terms before negotiating the percentage.
Show the client the service level behind the number: candidate supply, replacement speed, compliance turnaround, timesheet accuracy and account support. Price is easier to defend when the buyer can see what failure you remove.
Run the numbers
Calculate a defensible bill rate
Convert pay, burden and target margin into a client-ready bill rate.
Open the calculatorUnited States
How this differs by US state and metro
The answer above holds nationally. What changes locally is registration, insurance, wage rules and how much cash each contractor consumes — these are the states and metros founders ask us about most.
Illinois
Chicago · Naperville · Rockford
Illinois compliance costs are front-loaded, and light industrial margins are thin, so the funding line has to cover both the payroll gap and the administrative load. Model the long-assignment pay step-up into your bill rate from day one or it will eat the margin later.
Illinois guideOhio
Columbus · Cleveland · Cincinnati
Ohio's industrial base runs high headcount at moderate bill rates. That combination means the cash gap grows fast while margin per contractor stays modest, so a factoring line sized to invoice volume usually beats trying to self-fund.
Ohio guideGeorgia
Atlanta · Savannah · Augusta
Atlanta is a competitive, relationship-led market where clients push payment terms. Agencies that grow here usually secure a factoring facility early, because a single large logistics client can double your payroll requirement in a fortnight.
Georgia guidePennsylvania
Philadelphia · Pittsburgh · Allentown
Health systems are excellent clients and slow payers. If your first anchor client is a hospital network, assume 45 to 60 day terms and a credentialing lag before the first invoice, and secure funding that covers both.
Pennsylvania guideMetro-level wage, bill rate and startup cost detail:
Local questions
Does this change if I start in Illinois?
The national answer holds. What changes in Illinois is local: Illinois compliance costs are front-loaded, and light industrial margins are thin, so the funding line has to cover both the payroll gap and the administrative load. Model the long-assignment pay step-up into your bill rate from day one or it will eat the margin later. Check the Illinois page before you register anything, and model the cash gap on Illinois pay rates rather than national averages.
Is the answer different in Ohio than in Illinois?
The economics are the same shape; the local detail is not. In Ohio: Ohio's industrial base runs high headcount at moderate bill rates. That combination means the cash gap grows fast while margin per contractor stays modest, so a factoring line sized to invoice volume usually beats trying to self-fund. That affects your registration checklist and your working capital number, not the underlying principle.
Which US cities does this apply to?
All of them — but we publish metro-level bill rate, wage and startup cost detail for Atlanta, Philadelphia, Pittsburgh, Chicago and more, because pay rates and buyer mix vary far more between metros than between states.
Do I need a separate licence in every state I place in?
You register where you have employees and where you do business, not once nationally. Most states require unemployment insurance and withholding registration plus workers' compensation cover; a minority licence employment agencies, and some cities — New York City among them — licence separately from the state. Confirm each state and city before your first placement there.
Go deeper
How much do staffing agencies charge employers?
What staffing agencies charge employers: temp bill rates and markup, permanent placement fees, temp-to-hire conversion fees, and what actually sits inside the number.
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