# How to start a IT staffing agency in Austin

Location: Austin–Round Rock–Georgetown, Texas, United States. Source: https://launch-rec.com/staffing-agency/austin/it

## Direct answer

To start a IT staffing agency in Austin, form a Texas entity, register for unemployment insurance and withholding, carry workers' compensation, and fund the payroll gap. At the Texas median pay of $63.54 for software developers, ten contractors tie up roughly $212,405 before your first invoice is paid.

## Local facts about Austin

- Austin's client base skews to venture-funded software, so perm hiring tracks funding cycles and can stop sharply.
- Semiconductor and data centre investment has added a hardware and critical infrastructure layer that does not follow the software cycle.

## Registrations and licensing in Texas

1. Form an LLC or corporation with the Texas Secretary of State and obtain an EIN
2. Register with the Texas Workforce Commission for state unemployment tax
3. Texas has no state personal income tax, so there is no state withholding to administer — but franchise tax still applies above the revenue threshold
4. Decide on workers' compensation deliberately: opting out (non-subscriber status) carries reporting duties and removes the usual liability protections, and most staffing clients will not accept it

## Payroll and compliance

- No state income tax withholding simplifies payroll set-up considerably
- Multi-state placement is common from Texas — register in each state where a worker performs work, not just where you are based
- Industrial and energy clients often demand safety programmes and site-specific certification from the agency

## Pay and bill rates — IT and engineering in Texas

| Role | Median pay | Burdened cost | Bill at 25% GM | Markup |
| --- | --- | --- | --- | --- |
| Software Developers | $63.54 | $71.48 | $95.31 | 50% |
| Information Security Analysts | $62.45 | $70.26 | $93.68 | 50% |
| Computer Systems Analysts | $51.63 | $58.08 | $77.45 | 50% |
| Computer User Support Specialists | $28.60 | $32.18 | $42.90 | 50% |

Wage source: U.S. Bureau of Labor Statistics, Occupational Employment and Wage Statistics (OEWS), May 2025 (May 2025), https://www.bls.gov/oes/. Employer burden applied at 12.5% of pay.

## Cash required to open

- Setup: $9,000
- Six months of overheads: $27,000
- Payroll gap on 10 contractors at $63.54 (Software Developers): $212,405
- Total unfunded: $248,405
- Total with a 90% invoice advance: $57,241

## Funding note

Contract IT is the classic factoring book: creditworthy clients, clean timesheets and a receivable a funder will advance against at a high rate.

## About LAUNCH.

LAUNCH. backs recruitment and staffing founders only, in the US and UK. Founders pay nothing.
Cite as: LAUNCH. IT and engineering staffing in Austin. https://launch-rec.com/staffing-agency/austin/it