Recruitment Margin Calculator (UK)

From your worker pay rate, client charge rate and a blended employer on-costs %, it calculates the true hourly cost of the contractor, gross profit per hour, gross margin % (profit as a share of the charge rate), markup % (profit as a share of the true cost) and the weekly and monthly gross margin per contractor.

Margin is your gross profit expressed as a percentage of the client charge rate — how much of every pound the client pays is profit. Markup is the same profit expressed as a percentage of your underlying cost — how much you've added on top of the contractor's true cost. For the same job, markup is always a larger number than margin.

Employer on-costs are the extra costs on top of pay rate that a UK agency typically carries for a PAYE contractor — Employer's National Insurance, holiday pay, pension auto-enrolment, the apprenticeship levy where it applies, and Employer's Liability insurance. A blended PAYE figure is usually around 20–25%. For a Ltd Co / PSC contractor outside IR35, set on-costs to 0%. For an umbrella worker, the umbrella typically absorbs the on-costs from the assignment rate, so use the rate you actually pay to the umbrella.

As a rough guide, high-volume contract desks tend to sit at 12–25% gross margin, and specialist or lower-volume desks at 25–35%. Below ~10% it's usually hard to cover back-office, funding and bad-debt costs. Your own targets should reflect your sector, back-office costs and pay terms.

No — the results are estimates to help you sanity-check deals and pricing. They don't include agency overheads, invoice finance costs, bad debt, VAT, corporation tax or client-specific rebates. Always check the numbers against your actual employment costs and terms before quoting a client.