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Agency Salary Costs

Agencies paying temporary workers PAYE have the following additional minimum costs:

  • Employer’s National Insurance contributions
  • Statutory holiday pay *

One of the major benefits for recruitment agencies is that all your associated employment costs and risks are covered by the umbrella company. The cost of outsourcing these liabilities is usually born by the contractor as fees paid to the umbrella company.

Contractors can normally recover more than the umbrella fee by claiming legitimate contract expenses.

You can use our calculator below to work out your minimum hourly costs from a PAYE salary offer – alternatively, use our ‘take-home’ calculator to show your net pay and compare against agency payroll.

Total cost per hour:
Agency salary per week: (rate x hours)
Agency salary per annum: (x 52 weeks PAID)
Employers' NIC per annum:
Total salary costs per annum:
Gross cost per week:
Gross cost per hour: ( / hours)

Employers' NIC is currently 13.8% on gross salary after a starting threshold. All workers (including agency workers) are statutorily entitled to 5.6 weeks paid holiday. This increases hourly rates by over 10% (rate x 52/(52-5.6)).