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A 40% markup is only an 18% margin. Know which one you are quoting.
A $20/hr worker costs you $23 after FICA, SUTA, and comp — bill them at $28 and the $5 gap is 17.9% margin, not the 40% markup your sales deck says. This calculator separates markup from margin, prices the burden honestly, and scales the result to monthly margin per filled head.
Agency owners use it before quoting: $20 pay + 15% burden is $23 cost — a $28 bill is 17.9% margin, $800/mo per head, and markup talk hides it.
The industry band for light industrial and clerical staffing is a 35–55% markup on pay rate, which translates to a 15–25% gross margin after burden — the calculator shows both conversions because confusing them is how agencies go broke profitable. Skilled and professional staffing (IT, nursing, engineering) runs 60–75% markups because recruiting cost per placement is higher. The honest floor: your burden (typically 12–20% with comp) plus recruiting cost per hour plus overhead per hour plus profit target. If a client negotiates the bill rate down $1, that dollar comes straight out of margin — a $27 bill rate at $23 cost is a 14.8% margin, and at volume that $1 is $160,000 a year per 100 heads.
Everything you pay on top of the worker's wage: employer-side FICA at 7.65%, FUTA (effectively 0.6% on the first $7,000), SUTA (varies by state and your experience rating — 1–6%), workers' compensation (2–15% depending on job class — light industrial runs 5–8%, clerical under 1%), plus any benefits, PTO, or ACA health contributions you carry. A clean burden estimate for light industrial is 15–20%; clerical can run 12–14%. Get your actual comp mod rate from your carrier — a 1.3 experience mod on a high-risk class can push burden past 25% and quietly erase margin on every legacy contract priced at the old rate.
At a $5/hour gross margin, one filled W-2 temp position working full-time generates about $800/month or $10,400/year of gross margin — the monthly figure this calculator shows per head. Net profit is what remains after recruiter salaries, ATS/software, office, and bad debt (clients who pay in 60–90 days mean you float payroll — a real financing cost of 1–2% of revenue). Well-run agencies net 4–8% of revenue; the model only works at scale, which is why the per-head math matters more than the percentage. Ten heads at $800 is a side business; a hundred heads at $800 is an $80,000/month gross margin engine.