How Much Do Staffing Agencies Charge?

Updated on

February 16, 2026

min read

Instawork Editorial

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Pricing is a crucial factor when companies choose between staffing agencies. Some businesses select providers based primarily on lower costs, even when quality, reliability, or technlogy are not comparable. Understanding how agencies structure their pricing can help companies make more informed staffing decisions.

Key Takeaways for Businesses

Staffing agency charges include hourly rates, markups, and sometimes additional fees.
Markup percentages vary widely, depending on worker classification (W2 vs 1099), industry, and service complexity.
Direct hire fees, flat daily rates, and add-ons like onsite management or compliance checks can impact total cost.
Agencies compete primarily on price, but reliability, quality, and fill rates are crucial differentiators.

Typical Staffing Agency Fees

This table summarizes the most common costs and shows the range clients can expect depending on worker classification, industry, and agency practices.

Fee Type	Typical Range / Notes
Hourly worker pay (warehouse)	$15 – $30/hour
Client billing rate (warehouse)	$22 – $65/hour
Hourly worker pay (event)	$18 – $42/hour; specialty roles up to $50/hour
Client billing rate (event)	$23 – $65/hour; typical 4–5 hour events $30–$37.50/hour
Markup (1099)	13% – 40% depending on agency, volume, and role
Markup (W2)	25% – 60%; warehouse usually 25%–40%, hospitality can go higher
Flat daily pricing	~$45/day per worker (varies by agency)
Direct hire fees	Varies: some charge substantial upfront fees, others waive after 120–450 hours; sometimes tied to worker longevity
Booking / usage fees	Optional; additional per-shift fees above markup
Background checks / drug tests / compliance	Often billed separately unless included in all-inclusive markup
Onsite management / supervisor fees	Optional, extra if requested
Travel / transportation fees	Charged by some agencies; platforms like Instawork often include or avoid these costs
W2 vs 1099 cost difference	W2 costs ~10%+ higher due to payroll taxes, workers’ comp, and benefits

Hourly Rates for Different Roles

Pricing depends on the role and the experience required. Higher-quality workers or those with specialized skills command higher rates.

Warehouse Workers

Warehouse workers typically earn between $15 and $30 per hour. Client billing rates are usually higher than worker pay, reflecting agency markups, ranging roughly from $22 to $65 per hour. Agencies focused on flexibility, reliability, and quality may charge at the higher end, while others may offer slightly lower pay.

Event Workers

Hourly rates vary widely based on role, location, and urgency. Event workers typically earn $18–$42 per hour, with specialized or high-demand roles sometimes reaching $50 per hour. Clients generally pay $23–$65 per hour, though many aim for $30–$37.50 per hour for typical 4–5 hour events.

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Understanding Agency Markups

Markups are the additional percentage or amount charged above the worker’s base pay. For example, a worker earning $20/hour with a 25% markup would cost the client $25/hour.

Markup Examples by Worker Type

Worker Type	Worker Pay	Markup %	Client Bill Rate	Notes
1099 Warehouse Worker	$20/hour	25%	$25/hour	Typical lower-cost placement
W2 Warehouse Worker	$20/hour	30%	$26/hour	Includes payroll taxes, workers’ comp, and admin costs
1099 Event Worker	$22/hour	35%	$29.70/hour	Higher markup for specialized roles
W2 Event Worker	$22/hour	40%	$30.80/hour	Covers additional W2 compliance and benefits

How Markups Are Calculated

The agency sets the base pay for the worker.
The markup percentage is added to cover administrative costs, insurance, benefits, and profit.
The client pays the total bill rate, which equals worker pay + markup.

Example: A warehouse worker earning $20/hour with a 25% markup costs the client $20 × 1.25 = $25/hour.

Markup rates can vary widely: 1099 workers might see markups from 13%–40%, while W2 workers range roughly 25%–60%. In warehouse staffing, W2 markups over 40% are rare; in hospitality, markups can be higher.

Factors Affecting Markups

Volume of business, client agreements, location, and service complexity can all influence markup rates. Some agencies offer tiered pricing, flex rates, or credit-based systems where clients prepay for hours or shifts.

Other strategies

Agencies may provide tiered rebates, minimum spend guarantees, or annual incentives to adjust markup based on client usage.

Flat Daily Pricing

Some agencies offer flat daily fees per worker—for example, around $45/day—which can simplify budgeting for clients.

Direct Hire Fees

Direct hire fees apply when a client wants to convert a temporary worker to a permanent employee. Policies vary by agency: fees may be tied to worker longevity, waived after a certain number of hours worked (typically 120–450 hours), or charged upfront. Some agencies use fee waivers strategically to negotiate business.

W2 vs 1099 Compliance Costs

Worker classification affects overall pricing. For 1099 workers, agencies pay only the contractor, with minimal administrative costs and occasional occupational accident insurance. W2 workers involve higher costs due to payroll taxes, workers’ compensation, benefits, and insurance, which can increase overall agency expenses by roughly 10% or more compared to 1099 placements.

Additional Fees Businesses Should Know About

Some agencies charge booking or usage fees on top of markup. Background checks, drug tests, and compliance checks are often billed separately. Fees for onsite management apply if clients request supervisors or leadership, and travel or transportation costs may be added, though platforms like Instawork often source nearby workers to avoid these extra charges.

How Staffing Agencies Compete

Price vs Quality

Price is often the leading factor in agency selection. Businesses seeking temporary labor frequently prioritize lower rates, even over quality or reliability. Agencies compete on their ability to fill shifts reliably with high-quality workers. While price may get attention initially, clients often realize value differences after working with the agency.

Using Multiple Providers

Companies often balance several staffing agencies to meet price, quality, and availability needs. Transparent billing and clear markup structures help in evaluating options.

Billing Practices

Billing practices differ: some agencies invoice weekly, others monthly. Clients increasingly seek transparency, wanting to understand how much of the total bill goes directly to workers versus the agency’s markup or additional fees.