Bill Rate Calculator
Turn a pay rate into a client bill rate and see gross profit and margin as you type.
Last reviewed 2026-09-02Reviewed by the Skillora team2025 US federal defaults
Payroll taxes + benefits
Applied to pay rate
$45.00/hr
Bill rate
$35.40/hr
True cost
$9.60/hr
Gross profit
21.3%
Gross margin
At a $30.00/hr pay rate with 50.0% markup, you bill $45.00/hr and keep $9.60/hr after the 18.0% employer burden.
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Estimates only, using editable 2025 US defaults. Tax and insurance rates vary by employer, classification, and locality. Verify with a licensed accountant before relying on these figures.
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A bill rate is the hourly price a staffing agency charges a client for a placed worker. The pay rate is what the worker earns. The gap between them has to cover payroll taxes, insurance, benefits, and your profit, in that order. This staffing bill rate calculator takes a pay rate, an employer burden percentage, and a markup, then returns the bill rate, your true cost, gross profit per hour, and gross margin.
Most agencies price from markup because clients negotiate in markup. That habit hides a problem. Markup is measured on pay. Burden is also measured on pay. The two compete for the same dollars. A 55% markup with a 22% burden does not leave 55% of anything. It leaves 21.3% of the bill rate. The worked example below shows every step.
Test a quote here before you send it. Set the burden to match the state and the workers comp class. Set the markup to what the client will sign. Then read the margin, not the markup. Margin is the number that pays your recruiters.
How to calculate a staffing bill rate
Four lines of arithmetic. The order matters because burden and markup both start from the pay rate.
True cost per hour = pay rate × (1 + burden %)
Bill rate = pay rate × (1 + markup %)
Gross profit per hour = bill rate − true cost
Gross margin = gross profit ÷ bill rate
Burden is every employer cost that rides on top of wages: employer FICA at 7.65%, FUTA, state unemployment insurance, workers compensation, and any benefits or paid time off you fund. For a W2 contractor with no benefits, burden usually lands between 12% and 20% of pay. Add a health plan and PTO and it passes 25%. The labor burden calculator itemizes each line and pre-fills state SUI rates.
Markup is quoted on the pay rate by convention in US staffing. If a client or an MSP quotes markup on burdened cost instead, the same percentage produces a higher bill rate. Ask which base they mean before you compare offers.
Worked example: $40 pay rate, 22% burden, 55% markup
| Step | Arithmetic | Result |
|---|---|---|
| Pay rate | given | $40.00 |
| Burden (22%) | $40.00 × 0.22 | $8.80 |
| True cost | $40.00 + $8.80 | $48.80 |
| Bill rate (55% markup) | $40.00 × 1.55 | $62.00 |
| Gross profit | $62.00 − $48.80 | $13.20 |
| Gross margin | $13.20 ÷ $62.00 | 21.3% |
The markup was 55%. The margin is 21.3%. Two things shrank it. First, markup and margin use different bases: 55% of pay is 35.5% of bill (55 ÷ 155). Second, burden took $8.80 of the $22.00 markup before profit started. Over a 2,080-hour year this placement produces $27,456 in gross profit ($13.20 × 2,080). Recruiter salary, software, insurance, and rent come out of that.
Run the same worker at 45% markup. Bill rate $58.00, gross profit $9.20, margin 15.9%. Ten points of markup was $4.00 an hour and 5.4 points of margin. Now reverse it. To hit a 25% margin on this worker, bill rate = true cost ÷ (1 − 0.25) = $48.80 ÷ 0.75 = $65.07, which is a 62.7% markup. Solve for the margin you need and quote the markup it implies, not the other way around.
Bill rate benchmarks by role
Markup varies more by role family than by region. Margin before burden is markup ÷ (1 + markup). The last column subtracts a 20% burden so you can compare against the gross margin on your P&L.
| Role family | Typical markup | Margin before burden | Gross margin at 20% burden |
|---|---|---|---|
Light industrial Volume placements, thin dollars per hour, the highest workers comp class codes. | 35% to 55% | 25.9% to 35.5% | 11.1% to 22.6% |
Clerical and administrative Low workers comp, short assignments, price-sensitive clients. | 40% to 60% | 28.6% to 37.5% | 14.3% to 25.0% |
Skilled trades Certifications, safety compliance, and drug screening justify the premium. | 45% to 70% | 31.0% to 41.2% | 17.2% to 29.4% |
Healthcare and nursing Credentialing cost plus per diem and travel premiums. Contract terms swing the margin. | 45% to 75% | 31.0% to 42.9% | 17.2% to 31.4% |
IT and engineering contract High pay rates turn a middling percentage into strong gross profit dollars. | 40% to 70% | 28.6% to 41.2% | 14.3% to 29.4% |
Finance and accounting Project and interim work. Markup rises with credentials such as CPA. | 45% to 70% | 31.0% to 41.2% | 17.2% to 29.4% |
Executive and professional Interim executives and scarce specialists. Long searches, few substitutes. | 50% to 85% | 33.3% to 45.9% | 20.0% to 35.1% |
Industry survey ranges, 2025-2026 estimates. Compiled from American Staffing Association industry data, Staffing Industry Analysts reports, Bullhorn GRID Industry Trends Report. Individual agencies vary widely; use as a sanity check, not a price list.
At a $20 light industrial pay rate, a 45% markup bills $29.00 and earns $9.00 an hour before burden. At a $60 software engineer pay rate, the same 45% bills $87.00 and earns $27.00. The percentage is identical. The second desk produces three times the gross profit per hour, which is why agencies chase professional placements and why light industrial only works at volume.
Markup is not margin
Markup measures profit against pay. Margin measures profit against bill. The $22.00 gap between $40 pay and $62 bill is a 55% markup and a 35.5% margin at the same time. Subtract burden and the margin drops to 21.3% while the markup you quoted stays 55%. Clients negotiate in markup because it sounds larger than it is. Your P&L reports margin because margin funds the business. Convert before you quote. The staffing markup calculator has the full conversion table from 20% to 100%.
Mistakes that erase margin
Five ways a 21.3% margin on paper becomes 12% in the bank.
1.Setting burden from a mid-year payroll report
State unemployment tax applies only up to a wage base, from $7,000 in some states to more than $60,000 in others. Every January 1 the meter resets and you pay the full rate on every worker again. If you set burden from a June payroll report, the first quarter costs more than you priced. Use the annual average, or price Q1 separately.
2.Using one workers comp rate for every class code
Workers comp is priced per $100 of payroll by class code. A clerical code costs cents. A warehouse, roofing, or trucking code can cost several dollars. One blended burden across the desk means office placements subsidize the trades placements, and the trades quotes lose money on their own.
3.Forgetting paid sick leave accrual
More than a dozen states and many cities require paid sick leave for temporary workers, typically one hour for every 30 worked. An hour of accrued leave is an hour of pay with no bill rate behind it. If it is not in the burden, it comes out of the margin.
4.Billing overtime at straight time
The worker earns 1.5x after 40 hours. If the contract bills straight time, each overtime hour on the $40 example costs $60.00 in pay plus about $13.20 in burden against a $62.00 bill: a loss of $11.20 an hour. Write the overtime bill rate into the contract as pay × 1.5 × (1 + markup), which is $93.00 here.
5.Ignoring payment terms
You pay the worker every Friday. The client pays in 45 or 60 days. At a $62.00 bill rate and 40 hours, you finance $2,480 a week per worker until the invoice clears. Payroll funding and factoring typically cost 1% to 3% of the invoice, which is 1 to 3 points of margin on a placement that only had 21.3. Price the terms or shorten them.
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Frequently Asked Questions
- How do you calculate a staffing bill rate?
- Multiply the pay rate by one plus your markup. A $40 pay rate at 55% markup bills $62.00. To see whether that rate makes money, also multiply pay by one plus burden to get true cost ($48.80 at 22%), subtract it from the bill rate for gross profit ($13.20), and divide by the bill rate for margin (21.3%).
- What is the difference between pay rate, true cost, and bill rate?
- Pay rate is the worker's hourly wage. True cost is pay plus employer burden: payroll taxes, unemployment insurance, workers comp, and benefits. Bill rate is what the client pays per hour. Gross profit is bill rate minus true cost, and gross margin is gross profit divided by bill rate.
- What is a typical staffing bill rate markup?
- Industry survey ranges for 2025-2026 put most markups between roughly 35% and 75% of the pay rate. Light industrial and clerical sit at the low end; skilled trades, healthcare, IT, and finance in the middle; executive and specialist contract work at the top. Hard-to-fill roles and short assignments go higher.
- Is markup applied to the pay rate or to the burdened cost?
- US staffing convention applies markup to the pay rate, and this calculator follows it. Some clients and MSP programs quote markup on burdened cost instead. The same percentage on a larger base gives a higher bill rate, so confirm the base before comparing quotes.
- What gross margin should a staffing agency target?
- After burden, commercial staffing (light industrial, clerical) commonly runs 15% to 25% gross margin and professional staffing (IT, finance, healthcare) 20% to 35%. Net margin after recruiter pay, software, and overhead is usually single digits, which is why a few points of markup matter.
- Is the bill rate calculator free?
- Yes. It runs in your browser with no sign-up, and nothing you enter is stored. The defaults are 2025 US federal figures, and every field is editable.