Free HR calculator
Staffing Agency vs Payroll Cost Calculator
The agency invoice and the payroll ledger price the same hour of work in different currencies. This calculator puts them in one table. What your contingent workers cost on agency billing, on a payrolling arrangement, and on your own payroll with and without benefits. It adds the savings and the breakeven if you convert.
Before you start
What you will need. Number of contingent workers, Hours per week, Overtime hours per week, Weeks the work is needed
The work and the rates
Savings at the best alternative
The method
What staffing agency workers cost versus your own payroll
A staffing agency bills your pay rate plus a markup. Survey data across 2025 puts that markup between 25% and 75% of the pay rate, with most general staffing in the middle of the band. The markup is not gouging: it covers the employer taxes and workers comp the agency carries, its screening and overhead, and its margin. The comparison question is what those same hours cost when you carry the burden yourself. This calculator prices four routes side by side using the same workers, hours, and weeks.
How this is calculated
The four ways to staff the same work
Staying with the agency prices every hour, overtime included, at your pay rate plus the full markup. A payrolling arrangement keeps workers on an agency payroll you do not administer. The markup is reduced, commonly around 30%, because you did the recruiting. Internal payroll with no benefits carries only the statutory burden. That is the employer share of FICA at 7.65%, FUTA at an effective 0.6%, your state unemployment rate, and workers comp. Internal payroll with benefits adds the full benefits load. Across private industry, benefits run 30.1% of total compensation on the March 2026 BLS Employer Costs for Employee Compensation release. The last two routes also carry any severance reserve or buyout you enter, because conversion is rarely free.
How the breakeven works
When you enter a conversion cost, the calculator divides it by the weekly gap between the agency bill and your with-benefits payroll cost. The result is the number of weeks of continued need it takes for conversion to pay for itself. A short remaining need and a high buyout can make staying on agency billing the correct answer. The tool will say so rather than always recommending conversion.
What the numbers leave out
The model prices labor for the period you enter. It does not price recruiting effort, ramp time, or the compliance exposure of long temp assignments. Co-employment risk and worker misclassification carry their own costs. California willful-misclassification penalties alone run $5,000 to $25,000 per violation. If your plan involves engaging former temps as independent contractors, run the classification tests first. The Independent Contractor Classification & Risk Kit and the Staffing Agency Management Kit cover that layer. The Contingent Workforce Headcount & Spend Tracker keeps the program visible after the decision.
Carry this into the decision
Model a whole program, not one crew
The paid Excel workbook adds a multi-role program model, a burden builder for your real rates, saved scenarios, and a sourced assumptions tab.
$39. 30 days. Reply to your receipt or email support@truestephr.com for a full refund. No form or explanation is required, and you keep the files.
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Put your own numbers in and read the result on screen.
Put your own numbers in and read the result on screen.
Put your own numbers in and read the result on screen.
This tool estimates from the figures you enter. It is general information rather than legal, tax, or accounting advice, so check the result against your own records before you rely on it.