Recruitment Charge Rate Calculator

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Recruitment Charge Rate Calculator

Calculate bill rates, statutory costs, and agency profit margins.

Taxes, insurance, pension, holiday pay (typically 15-25%)
Percentage added on top of total costs

Calculation Results

Total Cost (Pay + On-Costs)

–

Agency Profit (Per Unit)

–

CLIENT CHARGE RATE

–

(Per Hour/Day)

Weekly Billing Estimate: –

function calculateRecruitmentRate() { // Get Inputs var payRate = parseFloat(document.getElementById("payRate").value); var onCostPercent = parseFloat(document.getElementById("onCostPercent").value); var markupPercent = parseFloat(document.getElementById("markupPercent").value); var hoursPerWeek = parseFloat(document.getElementById("hoursPerWeek").value); // Validation if (isNaN(payRate) || payRate <= 0) { alert("Please enter a valid candidate pay rate."); return; } if (isNaN(onCostPercent) || onCostPercent < 0) { onCostPercent = 0; } if (isNaN(markupPercent) || markupPercent < 0) { markupPercent = 0; } if (isNaN(hoursPerWeek) || hoursPerWeek < 0) { hoursPerWeek = 0; } // Logic // 1. Calculate Statutory Costs (Burden) var statutoryCostAmount = payRate * (onCostPercent / 100); // 2. Total Cost of Employment var totalCost = payRate + statutoryCostAmount; // 3. Calculate Markup/Profit // Markup is applied to the Total Cost of Employment var profitAmount = totalCost * (markupPercent / 100); // 4. Final Charge Rate var chargeRate = totalCost + profitAmount; // 5. Weekly Totals var weeklyTotal = chargeRate * hoursPerWeek; // Display Results document.getElementById("resTotalCost").innerHTML = totalCost.toFixed(2); document.getElementById("resProfit").innerHTML = profitAmount.toFixed(2); document.getElementById("resChargeRate").innerHTML = chargeRate.toFixed(2); document.getElementById("resWeeklyTotal").innerHTML = weeklyTotal.toFixed(2); // Show Result Section document.getElementById("resultsSection").style.display = "block"; }

Recruitment Charge Rate Calculator Guide

Establishing the correct charge rate is the cornerstone of a profitable recruitment agency. Whether you are placing temporary staff, contractors, or calculating billable hours for consultancy, understanding the buildup of costs—from candidate pay to statutory burdens—is essential to ensuring your agency maintains healthy margins.

This Recruitment Charge Rate Calculator helps staffing professionals instantly compute the bill rate for clients based on the candidate's base pay, required government employment costs (on-costs), and your desired agency markup.

How to Calculate a Recruitment Charge Rate

The formula for calculating what to charge a client generally involves three distinct steps. It is not as simple as adding a fee on top of the salary, as employment taxes and insurance must be covered first.

1. Determine the Base Pay

This is the gross amount paid to the worker per hour or per day. This figure does not include any taxes or benefits; it is simply the agreed rate of pay for the candidate.

2. Add Statutory On-Costs (The Burden)

Before you add your profit, you must account for the "Total Cost of Employment." In most jurisdictions, the employer (the agency) is liable for certain costs on top of the salary. These often include:

  • Employer's National Insurance or Social Security contributions.
  • Pension scheme contributions.
  • Holiday pay accrual (WTR).
  • Apprenticeship levies or local payroll taxes.

In our calculator, this is represented as the Statutory Burden %. A common safety net figure ranges between 15% and 25% depending on specific local labor laws.

Formula: Total Cost = Base Pay + (Base Pay × Burden %)

3. Apply the Agency Markup

The markup is your agency's gross profit. It covers your internal overheads (rent, recruiter commissions, software) and net profit. Markup is typically applied to the Total Cost, not just the base pay.

Formula: Charge Rate = Total Cost + (Total Cost × Markup %)

Markup vs. Gross Margin: What's the Difference?

In recruitment, these terms are often used interchangeably but mean different things mathematically:

  • Markup is the percentage added on top of the cost. (e.g., Cost 100 + 20% Markup = 120 Bill Rate).
  • Gross Margin is the profit calculated as a percentage of the final bill rate. (e.g., Profit 20 / Bill Rate 120 = 16.6% Margin).

This tool uses the Markup method, which is the standard pricing model for temporary staffing and contract recruitment.

Why Charge Rates Vary

Several factors can influence the final rate you present to a client:

  • Skill Scarcity: Highly specialized roles command higher markups due to the difficulty of sourcing talent.
  • Volume: Agencies may accept a lower markup percentage in exchange for a high volume of placements or exclusivity agreements.
  • Risk Factors: If the agency assumes liability for errors or omissions, the markup should increase to cover insurance premiums.
  • Payment Terms: Clients with longer payment terms (e.g., Net 60) may incur a higher charge rate to offset the agency's cash flow financing costs.

Frequently Asked Questions

What is a standard recruitment markup?

While this varies by industry, standard markups for temporary general staffing often range from 15% to 25%. Specialized IT, engineering, or executive interim roles can command markups of 30% to 50% or more.

Does this calculator include VAT/Sales Tax?

No. The charge rate calculated here is the net figure. You should add VAT or applicable sales tax to the final invoice sent to the client.

How do I calculate Holiday Pay?

Holiday pay is typically accrued as a percentage of the hourly rate. For example, in the UK, statutory leave often equates to roughly 12.07% of the pay rate. You should include this percentage within your "Statutory Burden / On-Costs" input field to ensure it is covered in the bill rate.

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