Staffing agencies place temporary, contract, and direct-hire workers with client businesses and bill those clients for the labor. Invoices usually go out weekly or biweekly, based on approved timesheets, and cover hours worked by each placed employee plus any overtime, premium, or placement fees.
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Most staffing agencies bill temporary and contract labor at an hourly bill rate, which is the worker's pay rate multiplied by a markup. Markups commonly run 25% to 60% for light industrial and clerical roles and higher for skilled, technical, or specialized roles, because the markup covers payroll taxes, workers' compensation, unemployment insurance, liability coverage, and agency overhead plus profit. Overtime is billed at 1.5 times the regular bill rate (or at the pay rate times 1.5 times the markup, depending on the contract), and double time or holiday hours are billed at their own multiples. Direct-hire (permanent placement) is a one-time fee, typically 15% to 25% of the first-year salary, often with a replacement guarantee of 30 to 90 days. Temp-to-hire arrangements add a conversion fee, or waive it after a set number of hours worked. Some agencies also offer payroll-only services or managed service programs billed as a flat fee or per-head fee.
| Service | Priced | Typical range |
|---|---|---|
| Light industrial temp (warehouse, packaging, general labor) | per hour | $20-32 |
| Clerical / administrative temp | per hour | $25-42 |
| Skilled trades or technical temp (forklift, welder, CNC, IT help desk) | per hour | $32-65 |
| Professional contract (accounting, engineering, IT) | per hour | $50-120 |
| Direct-hire placement fee | percent of first-year salary | 15%-25% |
| Temp-to-hire conversion fee | flat fee or percent of salary | $1,500-6,000 |
| Overtime hours | per hour (1.5x bill rate) | $30-48 for light industrial |
| Payroll-only or on-site coordinator | per month | $1,500-4,500 |
Typical US ranges. Rates vary by region, experience, and job size.
| Description | Qty | Rate | Amount |
|---|---|---|---|
| Warehouse associates, regular hours, week ending 5/17 (4 workers, 160 hours total) | 160 hours | $26.00 | $4,160.00 |
| Warehouse associates, overtime hours, week ending 5/17 (1.5x bill rate) | 12 hours | $39.00 | $468.00 |
| Forklift operator, regular hours, week ending 5/17 | 40 hours | $34.00 | $1,360.00 |
| Forklift operator, overtime hours, week ending 5/17 (1.5x bill rate) | 5 hours | $51.00 | $255.00 |
| Drug screen and background check, new assignment (per candidate) | 2 each | $65.00 | $130.00 |
| Total | $6,373.00 | ||
Notes: PO #44182. Hours are based on timesheets approved by J. Ramirez on 5/19. Payment due Net 15 from invoice date. Invoices past due are subject to a 1.5% monthly finance charge. Remit by ACH or check payable to the agency.
Clients need to match charges to the people who actually worked, and it helps resolve disputes about who was on site.
Staffing invoices are tied to specific timesheet periods, and a clear period prevents double billing.
Overtime and holiday hours have different bill rates, and splitting them makes the math easy to check.
Many clients' accounts payable departments will not process an invoice without a PO or department code.
Approved timesheets are your proof of hours, and naming the approver heads off later challenges.
Direct-hire and conversion fees are calculated from salary and hire date, so the client needs to see how the fee was reached and whether the guarantee period applies.
These are often billed separately from labor, and itemizing them avoids confusion over the bill rate.
Staffing agencies carry payroll costs every week, so they generally bill weekly or biweekly and ask for Net 15 or Net 30, with Net 7 or due on receipt for new or higher-risk clients. Because the agency pays workers before the client pays the agency, many agencies run credit checks on new accounts, ask for deposits or prepayment from startups, or use invoice factoring to cover payroll. Late fees of 1% to 1.5% per month are common if stated in the service agreement. Direct-hire fees are usually due within 30 days of the candidate's start date. ACH and wire transfers are the most common payment methods, with checks still used by larger clients.
Spell out the bill rate for each role, how overtime and holiday hours are calculated, and what counts as a billable hour. Clients tend to question invoices when these terms were only discussed verbally.
Get a signed or electronically approved timesheet from the client supervisor before invoicing. It is your best evidence if the client later disputes hours.
Since you fund payroll before you get paid, use shorter terms, deposits, or credit limits for clients without a payment history. Extending Net 45 or Net 60 to a client can strain your cash flow quickly.
Note the date a temp can convert to permanent without a fee, and the replacement guarantee period on direct hires. Missing these windows means either lost fees or credits you did not plan to give.
Send invoices the same day each week right after timesheets close. Predictable timing makes it easier for client payables teams to pay on time and for you to forecast payroll funding.
Start with the worker's hourly pay rate and add your burden costs, which include employer payroll taxes, workers' compensation, unemployment insurance, and any benefits, then add overhead and profit. In practice most agencies apply a markup multiplier, such as 1.40 on a $18 pay rate for a $25.20 bill rate. Your actual costs, especially workers' comp rates for the role, determine what markup works.
Often yes, but it depends on the contract. Some agencies charge 1.5 times the regular bill rate, while others apply the markup only to the overtime pay rate, which produces a lower number. Decide which method you use, put it in writing, and apply it the same way on every invoice.
Most agreements make the fee due after the candidate starts, commonly within 30 days of the start date, and sometimes a portion is due at offer acceptance. If your agreement has a replacement guarantee, the fee is still typically invoiced at the start and a credit or replacement is given if the hire leaves within the guarantee window.
If your agreement includes a conversion or buyout clause, yes. It usually sets a fee that decreases as the worker logs more hours, or waives it after a set number of hours, such as 520 or 720. Without that clause in a signed agreement, it is hard to collect, so include it up front.
It varies by state. Many states do not tax staffing or labor services, but some tax certain types of services or temporary help. Check with your state department of revenue or a tax professional about what applies to your services and to any pass-through items.
Send a Staffing Agency estimate for approval, then turn it into an invoice when the work is done.
Staffing Agency estimate template