Recruitment Agency Margin Calculator (UK)
Free, no sign-up. Get instant gross margin per hour, margin % and weekly profit per contractor — with realistic UK employer on-costs.
Typical UK PAYE blend: 20–25% (NI + holiday + pension + levy).
How to calculate recruitment agency margin (UK)
- Enter the hourly pay rate you pay the contractor.
- Enter the hourly charge rate you bill the client.
- Enter blended employer on-costs % (Employer's NI, holiday pay, pension, apprenticeship levy). UK PAYE is typically 20–25%.
- Read the gross margin per hour, margin % and weekly profit per contractor.
Recruitment margin FAQs
Recruitment agency margin is the gross profit your agency keeps on each contractor after employer on-costs (NI, holiday pay, pension, apprenticeship levy, insurance). It's the difference between your client charge rate and the true cost of the contractor — not just pay vs charge.
Contract desks typically aim for 12–25% gross margin. Lower-volume specialist desks can sit at 25–35%. Anything under ~10% rarely covers back-office costs once on-costs and bad debt are accounted for.
Standard PAYE on-costs include Employer's NI (~13.8% above the threshold), holiday pay (~12.07%), pension auto-enrolment (min 3%), apprenticeship levy (0.5% above the £3m allowance) and Employer's Liability insurance. As a rule of thumb, blended on-costs land around 20–25% on top of pay rate.
This calculator models a PAYE-style on-cost. Umbrella contractors typically pass the umbrella margin to the worker, and PSC/Ltd contractors have no employer on-costs — set on-costs to 0% for a Ltd Co contractor outside IR35.
Most agencies forget Employer's NI and holiday pay when quoting. Add 20–25% on-costs on top of pay rate and you'll often find a £5/hr 'margin' is closer to £2–£3 of real gross profit.
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