How much commission do agencies charge?

peanutpie05

Hi

I'd be really grateful of any info sanyone could send my way....

Quite an odd situation ... I am self employed - but my old employer wants me to go back into the office on an ad-hoc basis and I will be invoicing them for my time on an hourly basis.

Problem is my employer has asked me to find out how much someone like myself would get paid through an agency (or rather how much they would have to pay the agency as opposed to what I would recieve).

So, although I can see how much the employee gets paid; I have no idea how much commission an agency would add onto that.

Hope that makes senxe!!??

Many thanks in advance, pp05

lynzpower

It makes sense

Once I worked as a temp and one of the jobs was to clear invoices for payment.

the agency was invoicing the organisation 18.10 per hour, I was coming out with 7.50 this is central london though, so I dont know if it would apply the same as where you are.

cazziebo

It would vary a lot depending on type of job, skills required, and length of contract. Remember agencies also accrue holiday pay etc and pay NI.

give me an idea of type of job and I'll give you an idea.

zfrl

Contact a local agency as a potential employer & ask how much they would charge for a "whatever". Then call & say you want a job as a whatever & see what they would pay you.

It can also depend on whether the company employs a lot of temps & has a special rate.

BrunoM

In my limited experience, their markup was around 20%. But I am sure it varies quite a bit as per the above posters.

peanutpie05

cazziebo wrote: »

It would vary a lot depending on type of job, skills required, and length of contract. Remember agencies also accrue holiday pay etc and pay NI.

give me an idea of type of job and I'll give you an idea.

Thanks for your reply. I am the office manager (don't do the HR side of things though).
I was getting paid £15ph previously but I have been told to increase it.

I think if I added agents comission to that it would come out way too high. I was thinking of just adding 3% per year for the 3 years since I worked there last??

cazziebo

peanutpie05 wrote: »

Thanks for your reply. I am the office manager (don't do the HR side of things though).
I was getting paid £15ph previously but I have been told to increase it.

I think if I added agents comission to that it would come out way too high. I was thinking of just adding 3% per year for the 3 years since I worked there last??

I've been away from recruitment for a while now so don't take this as gospel. I'd calculate on-costs to be around £5 assuming no pension payments (just allowance for stat hols and other compulsory benefits, some agencies do now accrue for pension contributions) Agency mark up for a higher level long term position would be around 22 - 25%. (In the old days mark ups of 30 -40% were normal!) Bill rate would then be around £27 and they would be paying VAT on top of that. (for some reason we would always quote an odd number - I can only think because it would look more scientific! (eg£27.53 perhour)

So your 3% would be very low. Out of interest, why are they asking you to calculate it in this way? Ah just read your original post again!

Are they asking you to be self employed? If so you will be responsible for your own tax and NI admin etc. They may be doing this to get out of employer liability but if this is your only "client" then they can't do this. However, if you're getting some flexibility and advantage out of it then good. Did you get any other benefits as an employee? You may want to cost them in as well (eg life assurance, pension, luncheon vouchers, etc etc). Also, bear in mind if you are self employed then you won't be eligible for company sick pay so you might want to build an element in for this as well...

Caz

LozBingley

You are personally in demand, therefore the sky is the limit!

I have worked for agencies for the past 10 years, as an accountant, one of the first jobs I usually have to do is pay the agency bill. The commision they charge on top of my wage, considering they have to cover holiday pay (about 13%) and National Insurance (about 12%), varies considerably but generally its between 20% and 150% depending on your agreed rate and their minimum commision charge.

Basically, I’d say, add 20% onto your last pay rate with them as its them asking you to go back, then a further 30% to cover Holiday & N.I., then VAT if you are registered. If they accept this rate then all is good and well otherwise this will give you a good starting point for negotiation should they reject the rate.

Remember to never sell yourself short and that they asked you to come back