Recruiting agencies and solo recruiters bill employers for finding and placing candidates. Invoices usually cover placement fees on permanent hires, hourly markups on temp or contract workers, retainers for executive searches, and sometimes add-ons like background checks or job board postings.
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Most permanent placements are priced as a percentage of the candidate's first-year base salary, commonly 15 to 25 percent for contingency searches and 25 to 33 percent for retained or executive searches. Retained searches are usually billed in installments, often a third at signing, a third at a shortlist milestone, and a third at placement. Contract and temp staffing is billed as an hourly bill rate that marks up the worker's pay rate, typically 25 to 60 percent depending on role and who handles payroll taxes and insurance. Contract-to-hire arrangements add a conversion fee, often a sliding scale that drops the longer the worker has been placed. Some agencies also offer flat-fee placements for lower-level roles, hourly consulting for RPO (recruitment process outsourcing) work, and monthly retainers for ongoing hiring support. Guarantee periods, usually 30 to 90 days, affect when a fee is considered earned and should be spelled out in the agreement.
| Service | Priced | Typical range |
|---|---|---|
| Contingency permanent placement | % of first-year base salary | 15-25% |
| Retained executive search | % of first-year total cash compensation | 25-33% |
| Temp or contract staffing markup | % over worker pay rate | 25-60% |
| Contract-to-hire conversion fee | % of annual salary | 10-20% |
| Flat-fee placement (entry to mid-level roles) | flat fee | $3,000-10,000 |
| RPO or embedded recruiter support | per hour | $50-100 |
| Monthly hiring retainer | per month | $2,000-6,000 |
| Candidate background or reference check pass-through | per candidate | $30-150 |
Typical US ranges. Rates vary by region, experience, and job size.
| Description | Qty | Rate | Amount |
|---|---|---|---|
| Placement fee: Senior Accountant, Jane Doe, start date 3/3. Base salary $90,000 at 20% | 1 placement | $18,000.00 | $18,000.00 |
| Retained search installment 2 of 3: Controller search (shortlist delivered) | 1 installment | $9,000.00 | $9,000.00 |
| Contract staffing: Data Entry Clerk, week ending 3/14 (40 hrs at $26 bill rate) | 40 hours | $26.00 | $1,040.00 |
| Premium job board posting, 30 days | 1 posting | $395.00 | $395.00 |
| Background checks (pass-through) | 2 candidates | $65.00 | $130.00 |
| Total | $28,565.00 | ||
Notes: Payment due net 30 from invoice date. Placement fee is covered by a 90-day replacement guarantee per the signed fee agreement dated 1/15. Late balances accrue 1.5% per month. ACH or check accepted.
Most placement fees become due on the start date, so the invoice should show exactly which hire triggered the fee and when.
Showing the base salary and percentage lets the client verify the math and avoids disputes over what counts as compensation.
Ties the invoice to the terms on fee rate, guarantee period, and ownership of the candidate relationship.
Clients often hold payment until they understand the guarantee, and it protects you if a dispute comes up about a candidate who leaves early.
Hourly staffing invoices need weekly hours, approver name, and bill rate so the client's accounts payable team can match them to approved timesheets.
Larger employers often will not process an invoice without a PO or job requisition number.
Background checks, job board postings, and candidate travel should be itemized so the client sees what is fee and what is reimbursement.
Permanent placement fees are typically invoiced on or shortly after the candidate's start date, with net 15 or net 30 terms. Retained searches are billed in installments tied to milestones, and the first installment is often due before work begins. Staffing invoices for temps and contractors are usually weekly or biweekly, with net 15 to net 30 terms, and agencies that carry payroll often need faster payment from clients to cover wages. Late fees of 1 to 1.5 percent per month are common if they are written into the agreement. ACH and wire transfer are standard for large amounts, and checks are still common. Credit cards are less common because of the size of fees.
Without a signed agreement, a client can hire a candidate you submitted and dispute the fee. Include fee percentage, guarantee, payment terms, and how long you own a candidate introduction, often 6 to 12 months.
Send the invoice the day the candidate starts, or the next business day. Waiting for a convenient time lets payment slip and gives the client time to forget the terms.
State whether the fee includes signing bonuses, guaranteed commissions, or only base salary. Vague language leads to disputes when the offer includes a large bonus.
Spell out what happens if the hire leaves or is terminated within the guarantee period, such as a free replacement or a prorated credit. Clients are more comfortable paying promptly when they know the rules.
If you pay temps weekly while clients pay on net 30, you carry the gap. Ask for shorter terms, deposits, or consider financing arrangements before taking on large contract accounts.
Most agencies invoice on the candidate's first day of work, since that is the common trigger in fee agreements. Some invoice on offer acceptance for retained searches or when a deposit is required. Follow whatever your signed agreement says.
In most states, recruiting and placement services are not subject to sales tax, but a few states tax certain staffing or business services. Check with your state revenue department or an accountant.
Follow the guarantee in your agreement. Common remedies are a free replacement search or a prorated refund or credit. Document the departure date and keep the original invoice and payment record, then issue a credit memo if a refund applies.
Only if the agreement allows it. Retained searches typically bill milestone installments whether or not a hire is made. Contingency searches usually bill only on a successful placement, though some agencies charge for expenses or a cancellation fee.
Bill the hours worked at the agreed bill rate, usually weekly, and attach or reference the approved timesheet. Your bill rate covers the worker's wages, payroll taxes, workers' compensation, and your margin, so those costs are not listed as separate lines unless the contract is cost-plus.
Send a Recruiting Agency estimate for approval, then turn it into an invoice when the work is done.
Recruiting Agency estimate template