What is a typical staffing agency markup?

Published 2025 survey ranges run 25% to 75% of the worker pay rate, varying by segment, volume, and risk class. Light industrial and clerical roles tend toward the lower half; specialized and low-volume placements run higher. Your agreement is the number that matters, and the markup line in the calculator is editable for exactly that reason.

Is converting agency workers to payroll always cheaper?

No. Conversion trades the agency markup for your own burden plus any buyout or severance reserve. When the remaining need is short, the buyout is high, or your loaded burden approaches the markup, the agency can be the cheaper route, and the calculator will show that rather than assume conversion wins.

What burden percentage should I use?

The 18% no-benefits default is a planning figure covering FICA, FUTA, a mid-range state unemployment rate, and workers comp. The 30% with-benefits default tracks the BLS finding that benefits run 30.1% of total compensation in private industry. Both are editable inputs.

Does this cover misclassification or co-employment risk?

No. The tool prices labor cost only. Classification is tested separately under the DOL economic-reality factors, the IRS common-law test, and stricter state tests such as the California ABC test. The cost outputs are planning figures. General information, not legal or tax advice.

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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, plus the savings and the breakeven if you convert.

The work and the rates

Describe the contingent workforce, then set the markup and burden lines. Every rate is yours to change, because these vary by state, risk class, and agreement.

Number of contingent workers

Hours per week

hrs

Overtime hours per week

hrs

Weeks the work is needed

wks

Overtime is paid at 1.5x the pay rate in every column.

Average pay rate per hour

$/hr

What the worker earns, not the agency bill rate. The calculator builds each bill rate for you.

Severance or conversion cost per worker

An agency buyout fee or the severance reserve you would carry once workers are on payroll. Leave at zero for the pure rate comparison.

Markup and burden (% of pay)

Staffing agency markupSurvey range 25% to 75% of the pay rate (2025 industry data)

Payrolled-worker markupYou recruit, the agency carries the payroll at a reduced markup

Internal burden, no benefitsPlanning default 18%: FICA, FUTA, your SUTA rate, workers comp

Internal burden, with benefitsBenefits run 30.1% of total compensation (BLS ECEC, March 2026 release)

Savings at the best alternative

$316,160

Internal payroll, no benefits

Staying on agency billing

$1,482,000

Best alternative

$1,165,840

Agency bill rate

$30.00/hr

Bare wages for the period

$988,000

Email yourself this comparison We send it straight to your inbox. Adjust inputs

A 50% markup is not 50% profit. The markup funds the agency share of employer taxes, workers compensation, screening, and overhead, plus the agency margin. What conversion saves is the burden and margin you stop renting, priced against the burden you take on. Markup and burden are inputs here because they vary widely: SUTA runs 0% to 10% or more by state and experience rating, and workers comp runs 0.5% to 5% or more by class code. General information, not legal or tax advice.

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.

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Cost, classification risk, and agency terms in one kit

The flagship Contingent Workforce Cost & Compliance Kit sequences the full decision: model the cost, check the classification risk, fix the agency terms, track it.

See the kit

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, and this calculator prices four routes side by side using the same workers, hours, and weeks.

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, but at a reduced markup, commonly around 30%, because you did the recruiting. Internal payroll with no benefits carries only the statutory burden: 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, and 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, and 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, and the Contingent Workforce Headcount & Spend Tracker keeps the program visible after the decision.

What is a typical staffing agency markup?: Published 2025 survey ranges run 25% to 75% of the worker pay rate, varying by segment, volume, and risk class. Light industrial and clerical roles tend toward the lower half; specialized and low-volume placements run higher. Your agreement is the number that matters, and the markup line here is editable for exactly that reason.
Is converting agency workers to payroll always cheaper?: No. Conversion trades the agency markup for your own burden plus any buyout or severance reserve. When the remaining need is short, the buyout is high, or your loaded burden approaches the markup, the agency can be the cheaper route, and this calculator will show that rather than assume conversion wins.
What burden percentage should I use?: The 18% no-benefits default is a planning figure covering FICA, FUTA, a mid-range state unemployment rate, and workers comp. The 30% with-benefits default tracks the BLS finding that benefits run 30.1% of total compensation in private industry. Both are editable, and the paid workbook includes a burden builder that assembles your real number from your own SUTA rate, comp class, and benefits cost.
Does this cover misclassification or co-employment risk?: No. This tool prices labor cost only. Classification is tested separately under the DOL economic-reality factors, the IRS common-law test, and stricter state tests such as the California ABC test, and long temp assignments carry co-employment considerations of their own. The cost outputs are planning figures. General information, not legal or tax advice.

Markup, burden, and severance figures vary by state, industry, agreement, and benefits structure, so confirm your own rates before acting on the comparison. The defaults are sourced planning figures, current to the July 2026 review. General information, not legal or tax advice.