US · Margins
What percentage should a recruitment agency charge for a permanent placement?
Typical permanent placement fee percentages in the US and UK, what moves them, and how rebates and retainers change the economics.
The short answer
Contingent permanent placement fees typically run 15 to 25 percent of first-year salary in both the US and UK, with 20 percent the common midpoint. Executive and retained search runs 25 to 35 percent, often in three instalments. Volume agreements and preferred-supplier terms compress fees toward the lower end.
Key facts
- Contingent perm
- 15–25% of first-year salary
- Retained / executive search
- 25–35%, often billed in thirds
- Typical rebate period
- 4–12 weeks, tapered
- Invoice timing
- On start date, not on offer
Perm fees are set by scarcity and by how much of the risk you carry. Contingent work — you get paid only if your candidate starts — commands the standard band. Retained work, where the client pays to start the search, carries a higher percentage because the client has bought your commitment.
The rate is less negotiable than the terms. Clients push hardest on the rebate period, payment terms and the definition of first-year salary. A 20 percent fee with a twelve-week full rebate and sixty-day payment terms is worth materially less than an 18 percent fee with a four-week tapered rebate paid in fourteen days.
Define salary precisely in your terms of business. Whether guaranteed bonus, car allowance, sign-on payments and equity are included is worth several points on the fee and is the most common source of disputed invoices.
Taper rebates rather than offering all-or-nothing. A full refund at week eleven of a twelve-week guarantee is a large loss on work already done; a taper — one hundred percent in week one falling to twenty-five by week eight — is fairer and is accepted by most clients when it is presented as standard.
Volume changes everything. A preferred-supplier agreement at 15 percent with guaranteed flow can beat 22 percent on ad-hoc work, provided the flow is real. Ask for role forecasts before you discount, and reserve the right to revert if volume does not appear.
United 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.
Florida
Miami · Orlando · Tampa
Florida hospitality and healthcare clients frequently pay on 45 to 60 day terms while the workers are paid weekly. Seasonal peaks mean your largest payroll weeks and your slowest collection weeks can arrive together — size the facility for the peak, not the average.
Florida guideIllinois
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 guideLocal questions
Does this change if I start in Florida?
The national answer holds. What changes in Florida is local: Florida hospitality and healthcare clients frequently pay on 45 to 60 day terms while the workers are paid weekly. Seasonal peaks mean your largest payroll weeks and your slowest collection weeks can arrive together — size the facility for the peak, not the average. Check the Florida page before you register anything, and model the cash gap on Florida pay rates rather than national averages.
Is the answer different in Illinois than in Florida?
The economics are the same shape; the local detail is not. In Illinois: 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. 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 Chicago, Columbus, Cleveland, Cincinnati 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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