How much do temp agencies charge?
UK temp agencies usually charge the client an hourly rate that covers the worker's pay, 12.07% holiday pay, employer NI, pension and the agency's margin, plus VAT on the whole amount. No official body publishes average rates. Temp-to-perm fees are allowed only on the terms set by regulation 10 of the Conduct Regulations 2003.
Last checked 26 October 2026. General information, not legal or tax advice.
How the price is built
Agencies that supply temps as an employment business pay the worker themselves, or through an umbrella company, and bill the client a charge rate per hour worked. That rate has to cover:
- the worker's pay, at least the minimum wage (£12.71 an hour at 21 and over from 1 April 2026, GOV.UK);
- holiday pay, usually 12.07% for temps with irregular hours (WTR reg 15B);
- employer National Insurance at 15% above £96 a week;
- pension contributions of at least 3% of qualifying earnings for enrolled workers;
- the agency's own margin for its staff, risk and profit.
We could not find an official published average charge rate or margin for UK temp agencies. Rates differ by sector, location, notice and volume, so ask several agencies to quote the same booking.
What else can appear on the invoice
| Charge | What it is | Rule that applies |
|---|---|---|
| Hourly charge rate | Pay, on-costs and margin per hour worked | Set by contract; pay must meet the minimum wage |
| Overtime and unsocial hours | Higher rates for extra hours, nights or weekends | Set by contract; after 12 weeks pay may need to match the hirer's own staff |
| VAT | On the full charge, not just the margin | VAT Notice 700/34 para 2.3 |
| Temp-to-perm (transfer) fee | If the client takes the worker on directly | Conduct Regulations reg 10: only within set periods, and the client must be offered an extended hire instead |
| Introduction fee | For finding a permanent hire | Set by contract |
Temp-to-perm fees have limits
A client that takes a temp on permanently may owe a transfer fee, but only if the contract allowed it and the hire happens within the "relevant period": the later of 14 weeks from the first day the worker worked for the client, or 8 weeks after the last day (reg 10(5)). The contract must also let the client choose an extended period of hire instead of paying (GOV.UK). Outside those rules the fee cannot be enforced. The full detail is in our temp-to-perm fee guide.
Why the rate can rise during a booking
After 12 continuous calendar weeks in the same role with the same hirer, an agency worker is entitled to the same basic pay and conditions as if they had been recruited directly (AWR 2010 reg 7). If the client pays its own staff more, the agency's costs go up, and good terms of business say how the charge rate changes when that happens. Holiday, employer NI and pension also move every April when thresholds change.
Who pays what: the worker is never charged
An agency cannot charge the worker a fee for finding them work, except in a few listed occupations such as entertainment and modelling (GOV.UK, reg 26). All of the agency's income comes from the client. If a quote looks cheap, check it covers the legal on-costs above; an agency that underprices may be cutting corners on holiday pay or the minimum wage, and under the AWR the hirer can share liability for equal treatment breaches (reg 14).
Questions people ask
What is a typical temp agency markup in the UK?
There is no official figure. Government, HMRC and regulators do not publish average markups, and quoted numbers vary widely by sector and volume. What you can check is whether a quote covers the legal costs: minimum wage, 12.07% holiday pay, 15% employer NI above £96 a week and pension, before the agency's margin.
Do temp agencies charge VAT on the whole rate?
Yes, if the agency is VAT registered and supplies the staff. HMRC says VAT is due on the full amount charged, including the worker's pay and employment costs, not only the agency's margin. A business that cannot reclaim VAT, such as many care providers, pays that VAT as a real cost.
Can a temp agency charge me if I hire their temp?
Only within the Conduct Regulations. The contract must allow it, the hire must fall within 14 weeks of the first day worked or 8 weeks after the last day, whichever ends later, and you must have been offered an extended hire period instead of the fee. Otherwise the fee is unenforceable.
Can an agency charge the worker a fee?
No, not for finding them work, apart from a small set of occupations such as entertainment and modelling listed in the regulations. The agency's income comes from the client. Optional extra services offered to a worker must be genuinely optional and cannot be a condition of finding them work.
Sources
- GOV.UK: Rates and thresholds for employers 2026 to 2027 (NI 15%, secondary threshold £96 a week, Employment Allowance £10,500, levy 0.5% with £15,000 allowance, minimum wage rates)
- Working Time Regulations 1998, regulation 15B (12.07% accrual)
- GOV.UK: Supply of staff and staff bureaux (VAT Notice 700/34), paragraphs 2.3 and 5.1.2
- Conduct Regulations 2003, regulation 10 (charges to hirers, transfer fees)
- GOV.UK: Fees to hiring companies (transfer fees)
- Agency Workers Regulations 2010, regulation 7 (qualifying period)
- Agency Workers Regulations 2010, regulation 14 (liability)
- GOV.UK: Employment agencies and businesses
- Conduct Regulations 2003, regulation 26 (fees to work-seekers)
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