Staffing Agency Fees in 2026: Markup Rates, Bill Rates and What Employers Pay

By Elton Chan, Co-Founder October 15, 2026 9 min read

Staffing Agency Fees in 2026: Markup Rates, Direct Hire Fees and What Employers Pay, by Second Talent.

TL;DR: Staffing agencies bill temporary staff at the worker's pay rate plus a markup, and Robert Half's public contract with a Texas purchasing co-op sets that markup at 65% for administrative roles and 70% for IT. Direct hire placements most often cost 20% of first-year salary, and retained executive search about one-third of first-year cash pay.

A City of Galveston council agenda file shows what a staffing invoice looks like in practice: a data entry clerk billed at $27.00 an hour, with overtime at 1.5 times that rate. The clerk sees none of that number.

Behind that bill rate sits a lower pay rate and a markup that has to cover payroll taxes, insurance, recruiting and the agency's profit. The fee model you sign sets the size of that markup and what else lands on the invoice.

Three things that decide what you pay

1Listed staffing firms kept between 16.7% and 39.0% of contract revenue as gross margin in 2025, from ManpowerGroup to Robert Half.
2Temp-to-hire fees shrink as hours build up, and at Robert Half's OfficeTeam they reach zero after 640 hours.
3US temporary help employment stood at 2.49 million in September 2026, down from 3.16 million at its March 2022 peak.

How Much Do Staffing Agencies Charge?

It depends on who ends up employing the worker. If the agency stays the employer, you pay a marked-up hourly rate for as long as the assignment runs. If you hire the candidate onto your own payroll, you pay a one-time fee tied to salary.

The fee models below are versions of those two.

Fee model	How it is priced	Published example
Temporary or contract staffing	Markup on the worker's hourly pay rate	65% administrative, 70% IT (Robert Half)
Short assignments	Higher markup for small jobs	Up to 150% under 40 hours (Reliable Staffing)
Temp-to-hire	Hourly markup, then a conversion fee	25% of salary, falling to 0% after 640 hours (Robert Half)
Direct hire (contingency)	Share of first-year salary, paid on hire	20% most common (SIA survey); 30% default (Robert Walters, New York)
Retained executive search	Share of first-year cash pay, in stages	About one-third (Korn Ferry)
Managed service program (MSP)	Fee as a share of spend	Used by 80% of MSP clients (SIA)

Our recruitment agency fee calculator runs these models against a salary you enter. For the wider choice between a contractor and an employee, see contract vs. direct hire.

Staffing Agency Markup Rates and Bill Rates

The bill rate is the pay rate multiplied by one plus the markup.

Robert Half's pricing under the H-GAC cooperative purchasing contract, filed with a City of Galveston agenda item in September 2024, adds 65% to the base rate for administrative roles and 70% for IT roles.

A $20 pay rate becomes a $33 bill rate; a $40 IT contractor bills at $68.

Only part of that spread is fixed by law. The employer share of FICA is 7.65% of wages, 6.2% for Social Security and 1.45% for Medicare, according to the IRS.

Federal unemployment tax is 6.0% on the first $7,000 of wages, less a credit of up to 5.4%, which leaves about $42 a year per worker once the credit applies (IRS Topic 759).

Waterfall chart of how a $20 hourly pay rate becomes a $33 bill rate at a 65% markup, the rate in Robert Half's contract for administrative roles: $1.53 employer FICA plus $11.47 for other costs and profit.

The rest varies by state and job. State unemployment tax rates depend on the agency's claims history, and workers' compensation premiums depend on the job's risk class, so a warehouse assignment carries a heavier load than an office one.

Benefits the agency offers, recruiting costs, payroll administration and profit all come out of what is left.

Markup is not margin. A 65% markup on the pay rate is 39.4% of the bill rate ($13 of $33) before any payroll tax or insurance is paid. Agencies usually quote markup to clients and track margin internally.

Markups climb with the effort a role takes to fill.

The five-point gap between Robert Half's administrative and IT rates is consistent with the extra recruiting and skills screening technical roles need, and some roles add licensing checks on top.

For routine hourly roles that fill quickly, a staffing agency can still be the faster and simpler route.

Short jobs cost more per hour. The terms of Reliable Staffing in San Antonio allow a markup of up to 150% when an assignment runs less than 40 hours in total.

Recruiting and onboarding cost the agency the same whether a job lasts two days or two months.

How Much Do Staffing Agencies Make Off Their Employees?

Public filings answer this better than any survey. After paying workers and the payroll costs tied to them, Robert Half kept 39.0% of its contract talent revenue in 2025, according to its fourth-quarter earnings release.

Volume staffers keep far less: ManpowerGroup's gross profit came to 16.7% of revenue, based on the totals in its 2025 results.

Bar chart of fiscal 2025 gross margins from company filings: Robert Half permanent placement 99.8%, Robert Half contract talent 39.0%, Kforce flex 25.8%, TrueBlue 22.8%, Kelly Services 20.1%, ManpowerGroup 16.7%.

Between them sit Kforce, whose temp and contract business ran at 25.8%, TrueBlue at 22.8%, down from 25.9% a year earlier, and Kelly Services at 20.1%.

The firms at the top place mostly professional and technology staff; those lower down do more industrial and high-volume work.

Gross margin is not profit. Recruiters' pay, offices, job boards and technology all come out of it.

The 99.8% figure for permanent placement looks extreme for the same reason: a direct hire fee has almost no direct cost attached, since the candidate goes onto the client's payroll, and the recruiter's time sits in operating expenses instead.

Direct Hire Placement Fees

A direct hire placement is priced once, as a share of the hire's first-year salary. The most common fee is 20%, charged by 42% of North American staffing firms in a Staffing Industry Analysts survey.

Robert Half's Houston-Galveston contract sets 25%, the New York terms of Robert Walters default to 30%, and Korn Ferry's retained search runs about one-third of first-year cash pay.

What counts as salary, how the guarantee pays out and how long an agency can claim a candidate move the final bill as much as the rate does.

Our guide to direct hire placement fees covers those clauses, with the fee in dollars for common US roles.

Temp-to-Hire Conversion Fees

A conversion fee is what you pay to hire a temp before the agency has earned enough markup from them.

Robert Half's OfficeTeam scale charges 25% of the annual starting salary if you convert within the first 160 hours billed, and nothing after 640 hours, about 16 weeks of full-time work.

Column chart of Robert Half OfficeTeam temp-to-hire conversion fees by hours billed: 25% of annual salary for 0 to 160 hours, 20% for 161 to 320, 15% for 321 to 480, 10% for 481 to 640 and no fee after 640 hours.

The same contract says the no-fee point for other Robert Half divisions varies from 641 to 1,561 hours depending on the position.

Smaller agencies use different triggers.

Reliable Staffing's terms treat an assignment as temp-to-hire after 520 consecutive hours, charge a prorated 20% placement fee for an earlier hire within 12 months of the start date, and add a 10% violation fee if the client hires without telling the agency.

The cheapest conversion is usually the one you plan. If you expect to hire the temp, agree the hours threshold and fee in writing before the assignment starts, and time the offer to land after the fee drops.

Contract Clauses That Add to the Bill

The markup is rarely the only charge. These clauses come from the published terms of Robert Half and Reliable Staffing, and most agency agreements carry some version of them.

OvertimeBoth firms

1.5x bill rate

The multiplier applies to the whole bill rate, markup included, not only the worker's pay

Turned-away workersReliable

4 hours

Billed per worker sent home for a changed order, weather or faulty equipment

Late timecardsReliable

$100

Per worker affected, capped at $300 per invoice

Late paymentRobert Half

1.5% a month

Or the highest rate the law allows, whichever is lower

Pass-through costs are the ones to cap. Reliable can bill at cost for legal, medical or technology fees a worker incurs, and passes through new or increased labor costs. Robert Half may charge a technology fee when it supplies equipment.

Both are reasonable in principle and open-ended in practice, so ask for a list and a ceiling.

Large buyers often run staffing through a managed service program. In SIA's research, 80% of MSP clients pay a fee as a percent of the spend running through the program.

Ask who funds that fee, since it can sit inside supplier markups rather than on your invoice.

Staffing Industry Trends in 2026

US staffing is coming out of a three-year slump. The American Staffing Association reported its first year-over-year growth since late 2022 in the second quarter of 2026, with revenue up 3.3% and employment up 0.6%.

The recovery carried into the third quarter: temporary and contract staffing employment in the four weeks to September 13 ran 5.8% above the same period of 2025, according to the ASA Staffing Index.

$27.6B

US staffing sales in Q1 2026, down 1.6% from a year earlier

5.8%

Year-over-year rise in temp and contract staffing employment in the four weeks to Sept. 13, 2026

2.4%

SIA's forecast for US staffing revenue growth in 2026

Sources: American Staffing Association, June and September 2026; Staffing Industry Analysts, September 2026.

SIA expects the market to reach $183.1 billion in 2026 and grow a further 2.2% in 2027, in its September 2026 forecast. Its total covers more than the ASA's temporary and contract sales, so the two figures do not compare directly.

The BLS count of temporary help jobs shows the same turn. It fell every August from 2022 to 2025, then edged up 0.6% to 2,497,700 in August 2026, after BLS revised its first estimate down.

The preliminary September 2026 count of 2,486,800 was also 0.6% above a year earlier.

Area chart of US temporary help services employment each August from BLS data, in thousands: 2,955 in 2017, 2,478 in 2020, a peak of 3,081 in 2022, falling to 2,483 in 2025 and 2,498 in 2026.

Hiring Developers Without Agency Markups

For engineering roles, a 20% to 30% placement fee or a 70% hourly markup is paid on top of US salaries.

Second Talent matches companies with vetted developers from Asia at 50 to 70% below US hiring costs, and our guide to staffing agency fees in Asia compares local rates.

Tell us the role you need to fill and we will come back with candidates.

Frequently Asked Questions

Who pays the staffing agency fee, the employer or the worker?

The employer. Robert Half's annual report states that it charges candidates no fee for placement services.

What happens if a placed candidate leaves early?

Most contracts carry a guarantee, but its form varies. Robert Half's annual report refers to a 90-day guarantee period on permanent placements.

Robert Walters' New York terms give no refund and instead look for a replacement if the hire leaves within 12 weeks.

For temps, Robert Half does not charge for the first eight hours if you are unhappy with the worker and let it send a replacement. Our direct hire fee guide works through how a pro rata refund pays out.

Is an agency more expensive than hiring directly?

Usually, on fees alone. SHRM's 2025 benchmarking put the average cost per nonexecutive hire at $5,475, against $16,000 for a 20% fee on an $80,000 salary.

The gap narrows once you count recruiter time and the cost of a slow or failed search. For contractors, compare the bill rate with the cost of an employer of record or direct contract.

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Written by

Elton Chan

Elton Chan is the Co-Founder of Second Talent, a solution that connects global tech leaders with top-tier tech talent across Asia. He specializes in talent solutions and has led Second Talent’s rapid growth since 2024, helping scale its network to over 100,000 pre-vetted developers and earning industry recognition as the #1 in the Global Hiring category on G2. A long-time entrepreneur with deep roots in digital transformation, Elton previously co-founded Branch8, a Y Combinator–backed e-commerce technology firm, and served as the Founding Chairman of HKEBA, a leading Asia-focused business association driving innovation, digital education, and cross-border collaboration. His work bridges technology, talent, and business strategy to shape how companies scale in an increasingly remote and digital world.

Staffing Agency Fees in 2026: Markup Rates, Bill Rates and What Employers Pay

How Much Do Staffing Agencies Charge?

Staffing Agency Markup Rates and Bill Rates

How Much Do Staffing Agencies Make Off Their Employees?

Direct Hire Placement Fees

Temp-to-Hire Conversion Fees

Contract Clauses That Add to the Bill

Staffing Industry Trends in 2026

Hiring Developers Without Agency Markups

Frequently Asked Questions

Who pays the staffing agency fee, the employer or the worker?

What happens if a placed candidate leaves early?

Is an agency more expensive than hiring directly?

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