How Much Do Staffing Agencies Charge Employers in Canada?

A staffing agency charges employers one hourly bill rate for each temporary worker, and that rate is the worker’s wage plus a markup. The markup pays for the employer-side costs of employing the person, such as CPP, EI, vacation pay, public holiday pay and WSIB, plus payroll, recruiting, insurance and the agency’s own margin. For permanent hires, agencies usually charge a one-time fee based on a percentage of the person’s first-year salary.

There is no single price list, because every agency prices by role, shift, volume and risk. This guide explains how the numbers are built so you can compare quotes properly.

How do staffing agencies charge employers?

There are two main models:

• Temporary staffing: you pay an hourly bill rate for every hour the worker works. The worker is on the agency’s payroll, so you pay the agency, not the worker.
• Permanent placement (direct hire): the agency finds the candidate, you hire them onto your payroll, and you pay a fee. It is usually quoted as a percentage of the hired person’s first-year salary, with a guarantee period if the hire does not work out.
• Temp-to-hire: you pay the temp rate during the trial period. Ask in advance whether there is a conversion fee if you hire the worker, and how it is calculated.

How big is the markup on temp workers?

Published industry guides, mostly from the United States, put typical temp markups somewhere between about 25% and 75% over the worker’s wage. Light industrial roles tend to sit toward the lower part of that range, and specialised or short-notice roles toward the higher part. Those are general ranges, not Canadian figures, and every agency prices differently, so use them only as a rough guide and ask each agency for its own breakdown.

What does the markup pay for?

• Statutory employer costs: the employer share of CPP and EI, vacation pay, public holiday pay and WSIB premiums, plus Employer Health Tax where it applies
• Payroll and administration: running payroll every cycle, timesheets, deductions, year-end slips
• Recruiting and screening: advertising, interviews, reference calls and certificate checks
• Insurance and compliance: liability cover and meeting Employment Standards Act rules as the employer
• The agency’s margin: what is left to run the business

A simple example (illustration only, not our pricing)

Suppose a warehouse worker is paid $20 an hour and the agency’s bill rate is $28 an hour. The $8 difference is the markup. It first covers the statutory costs and payroll of employing that person, then recruiting and insurance, and what remains is the agency’s margin. The example is made up to show how the pieces fit. Real rates depend on the role, the shift, the number of workers and how long you need them.

How do staffing agencies make money?

They earn the part of the bill rate that is left after paying the worker’s wage and the costs of employing them. On temp work, that margin is earned hour by hour. On permanent placements, it is the placement fee. Reputable agencies are paid by the employer only, never by the job seeker. See do temp agencies charge workers a fee.

Is using an agency more expensive than hiring directly?

Per hour, yes, the bill rate is higher than the wage. But a direct hire carries costs that are easy to forget: advertising, time spent screening and interviewing, onboarding, payroll and WSIB administration, and the cost of replacing someone who does not work out. An agency makes the most sense when you need people quickly, have uneven demand or want to try people before you commit. For a steady, long-term role that you know you want, a direct hire or a temp-to-hire conversion can cost less over time.

What to ask for in a staffing quote

1. The bill rate for each role and shift, in writing
2. How overtime, statutory holidays, nights and weekends are billed
3. Whether the rate includes vacation pay, WSIB and payroll costs
4. Whether there is a minimum number of hours or a minimum assignment length
5. The fee, if any, if you hire the temp worker, and when it applies
6. What happens if a worker does not fit: is there a replacement guarantee and for how long?
7. How much notice you need to give to end an assignment
8. How often you are invoiced and the payment terms

What Supreme Employment includes

For temporary workers, we run payroll, pay vacation pay and handle WSIB as the employer of record. If a placement does not work out within 30 days, we replace the worker at no cost, and there is no long-term contract. You can get a free quote by calling 647-295-5358 or by sending the details through our contact page: the role, the shift, the number of workers and the site address.

Common questions

What percentage do employment agencies take?

On temp work the markup is added to the worker’s wage, so it is usually described as a percentage over the wage. On permanent placements the fee is usually a percentage of the first-year salary. The percentage varies by agency and role, so ask for it in writing.

Who pays the agency’s fee, the employer or the worker?

The employer. In Ontario a temporary help agency cannot charge workers a fee for finding them work.

Are there extra charges for overtime or holidays?

Usually the bill rate for overtime and statutory holidays is higher, because the agency pays the worker more for those hours. Ask how each is billed before you start.

Which roles can I staff through an agency?

We fill warehouse, manufacturing, general labour and office roles, plus personal support workers, drivers and security guards across Toronto and the GTA. For background, read what is a temp agency and how it works in Ontario.