Recruitment Agency Fee Calculator

Q: How do you calculate a recruitment agency fee?

Fee = first-year salary × fee percentage. On a $135,980 salary, a 20% contingency fee is $27,196 and a one-third retained fee is about $45,300. For a contract hire, the fee is the markup on every hour billed: at 47% over 12 months that is about $63,900 above the worker's pay.

Q: How is a contract staffing markup calculated?

Bill rate = pay rate × (1 + markup). A median US software developer earns $65.38 an hour; at a 47% markup the firm bills about $96.11. Roughly 9.4% of pay covers the employer's legally required payroll taxes (BLS Employer Costs for Employee Compensation, June 2026) and the rest is the firm's gross profit. The staff augmentation cost calculator breaks this down by role.

Calculate what a recruitment agency charges to fill a role: a contingency fee, a retained search fee, or the markup on a contract hire, side by side for one hire or several.

How agency fees are calculated

Placement fee = first-year salary × fee percentage. A contingency agency bills it once the hire starts; a retained search firm bills a larger share in stages during the search; a contract staffing firm adds a markup to every hour the worker bills.

1. The hire

First-year salary

US median, software developers

Hires

At the same salary

2. Fee terms

Contingency fee

Of salary, paid on hire

Retained fee

One-third at Korn Ferry

Contract markup

On the worker's pay rate

Contract length

months

For the contract markup

Contingency at 20%

Retained at 33.3%

Markup over 12 months

Second Talent

Fees for all hires. Second Talent charges no placement fee: $0 until you hire.

Agency fees side by side

Line item	Contingency	Retained	Contract markup	Second Talent
Fee per hire	$0	$0	$0	$0
Share of first-year salary	0%	0%	0%	0%
When you pay	Once the hire starts	In stages during the search	On every hour billed	No placement fee
All hires	$0	$0	$0	$0

Contract markup is the amount billed above the worker's pay over the contract: monthly pay × markup × months. About 9.4% of pay goes on the employer's legally required payroll taxes (BLS Employer Costs for Employee Compensation, June 2026); the rest is the firm's gross profit, here $0 per hire. The 47% and 79% markups are derived from the 2025 gross margins in the Kforce 2025 annual report and Robert Half 2025 annual report. Second Talent's Talent Subscription has no placement fee; you pay $29 to $39 USD an hour, billed monthly, once the engineer starts.

Recruitment agency fee questions, answered

How much do recruitment agencies charge?

Contingency agencies charge a percentage of the new employee's annual compensation (Robert Half 2025 annual report); Top Echelon, a US recruiting network, reports an average of about 22.5% across its members (Top Echelon). Retained executive search costs more: Korn Ferry's fee is generally one-third of the placed candidate's estimated first-year cash compensation (Korn Ferry fiscal 2025 annual report). Contract staffing firms add a markup to the worker's pay instead.

How do you calculate a recruitment agency fee?

Fee = first-year salary × fee percentage. On a $135,980 salary, a 20% contingency fee is $27,196 and a one-third retained fee is about $45,300. For a contract hire, the fee is the markup on every hour billed: at 47% over 12 months that is about $63,900 above the worker's pay.

What is the difference between contingency and retained search?

A contingency agency is paid only if you hire its candidate, usually once the hire starts. A retained firm is paid to run the search: Korn Ferry bills one-third of estimated first-year cash compensation plus a percentage for indirect expenses, earns it over the course of the search, and bills an extra amount if the final pay is higher than estimated (Korn Ferry fiscal 2025 annual report).

Is the fee charged on base salary or total compensation?

Check the contract. Robert Half describes its fees as a percentage of annual compensation (Robert Half 2025 annual report) and Korn Ferry uses estimated first-year cash compensation (Korn Ferry fiscal 2025 annual report), which can include a cash bonus. Agree in writing whether bonuses and sign-on payments count before the search starts.

How is a contract staffing markup calculated?

Bill rate = pay rate × (1 + markup). A median US software developer earns $65.38 an hour; at a 47% markup the firm bills about $96.11. Roughly 9.4% of pay covers the employer's legally required payroll taxes (BLS Employer Costs for Employee Compensation, June 2026) and the rest is the firm's gross profit. The staff augmentation cost calculator breaks this down by role.

What is an agency service fee?

It is what the agency charges for finding and placing the hire: a one-time placement fee for a permanent hire, or the markup on the pay rate for a contractor. Enter either in the calculator to see the amount per hire and across all your hires.

What does a hire cost on top of the agency fee?

Your own recruiter and interviewer hours, and the cost of the seat staying empty while you search. The recruitment cost calculator adds those up for in-house, agency and marketplace hiring. To see what the agency recruiter earns from the fee, use the recruitment commission calculator.

What does Second Talent charge?

Second Talent helps US startups hire vetted AI-Native Engineers and Specialists from Asia. The Talent Subscription has no placement fee: $0 cost until you hire, then $29 to $39 USD an hour, billed monthly ($4,599 to $5,999 for 160 hours). For permanent placements, Direct Hire is a one-time fee from 20% of the hire's annual salary. Both come with a 90-day, one-time replacement guarantee.

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