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Fees, terms and rebates
Temp margin calculator: the true cost of a temp's hour and what is left of your charge rate
Enter pay rate, hours and charge rate to see the hourly cost with holiday pay, employer National Insurance and pension, and your margin in pounds and percent.
The gap between what you pay a temp and what you charge the client is not your margin. On a £13.50 pay rate and a £19.50 charge rate the gap is £6.00. The agency keeps £2.13. The calculator shows where the other £3.87 goes.
Free tool
Temp margin calculator: the true cost of an hour with holiday pay, employer NI and pension, and what is left of your charge rate
Works in your browser. Nothing you type leaves this device unless you ask us to email you the result.
What an hour costs
Four things sit on top of the pay rate. The example is a 37.5-hour week at £13.50.
| Cost | Sum | A week | An hour |
|---|---|---|---|
| Pay | 37.5 × £13.50 | £506.25 | £13.50 |
| Holiday pay | 12.07% of £506.25 | £61.10 | £1.63 |
| Employer National Insurance | 15% of (£567.35 − £96) | £70.70 | £1.89 |
| Employer pension | 3% of (£567.35 − £120) | £13.42 | £0.36 |
| Total | £651.48 | £17.37 |
Holiday pay. A worker is entitled to 5.6 weeks of paid leave a year. For someone on irregular hours that accrues at 12.07% of the hours worked, which is 5.6 divided by the 46.4 working weeks left in the year. Whether you pay it as it accrues or when leave is taken, it is a cost of every hour worked.
Employer National Insurance. 15% of weekly pay above £96, in the tax year 2026 to 2027. It is charged on holiday pay as well as basic pay, so the calculator adds the two before working it out.
AI staff and workflows for recruitment agencies. Starting with cv screening and shortlist.See what we would set upPension. For a worker who has been enrolled, the minimum employer contribution is 3% of pay above the lower limit of qualifying earnings, £6,240 a year or £120 a week. Not every temp is enrolled: it depends on age, earnings and whether you have used postponement. Set the calculator to "No" for a worker who is not in the scheme.
The calculator leaves out your own costs: payroll, insurance, the consultant's time and the weeks the invoice goes unpaid. The margin has to pay for those.
Margin, markup and what the client hears
Three numbers describe the same booking and they are easy to mix up.
- Markup on pay is the charge rate over the pay rate: £19.50 is 44.4% above £13.50. This is the figure clients quote back at you.
- Margin in pounds is the charge rate less the full cost: £19.50 − £17.37 = £2.13 an hour, £79.77 a week.
- Margin as a percentage is that £2.13 over the charge rate: 10.9%.
A client who says "you are making 44% on this worker" is comparing the wrong two numbers. The table above is the answer: of the £6.00 gap, £3.87 is holiday pay, National Insurance and pension that the agency pays on the worker's behalf. Put the breakdown in the proposal and the conversation changes.
Pricing forwards from the margin you need
The fourth line of the result runs the sum the other way. Decide the margin you need for each hour, add it to the cost, and that is the charge rate: for £3.00 an hour on this worker, £20.37.
AI staff and workflows for recruitment agencies. Starting with cv screening and shortlist.See what we would set upRun it again whenever one of the inputs moves:
- A pay rise. Each £1 on the pay rate adds about £1.32 to the hourly cost here, not £1, because holiday pay, National Insurance and pension all rise with it. If the charge rate goes up by only the £1, your margin has fallen by 32p an hour.
- The National Living Wage. It is £12.71 an hour for workers aged 21 and over from 1 April 2026. The calculator warns you when the pay rate is below it.
- Week 13 on an assignment. After 12 qualifying weeks an agency worker is entitled to the same basic pay and conditions as a comparable direct recruit. If that means a higher pay rate, the charge rate has to move with it or the margin goes. Our 12-week rule calculator counts the weeks.
Agree in your terms how the charge rate changes when statutory costs do. A clause that lets you pass on a rise in the National Living Wage or employer National Insurance from the date it takes effect is the difference between a margin and a loss each April. Our guide to terms of business lists what else belongs there.
Part-time and low-hours bookings
Because National Insurance and pension only start above £96 and £120 a week, a short booking costs less per hour than a full week at the same pay rate. The second case in our test record is an eight-hour week at £12.00: employer National Insurance comes to 22p an hour, not £1.89. Do not price a full-time booking from a part-time one.
Limits
This is an estimate for pricing, using the rates for 2026 to 2027. It is not a payroll calculation: it does not handle directors, workers over state pension age, salary sacrifice or the Employment Allowance, and your payroll software's figure is the one that counts. Rates apply across the UK; check them again each April.
Overlyft can set up an AI assistant that drafts candidate and client emails for a consultant to approve. Who is put forward, and at what rate, stays the consultant's decision.
Where this comes from: GOV.UK rates and thresholds for employers 2026 to 2027 (employer National Insurance 15% above £96 a week; National Living Wage £12.71 from 1 April 2026); DWP written statement of 18 December 2025 (qualifying earnings lower limit £6,240); GOV.UK holiday pay guidance (12.07% for irregular-hours workers); all read 2026-10-01. Our arithmetic is checked by hand; the test record is in tests/talentwright/tools-check.txt.
AEO Lookup editorial team
We write practical guides for people who run small UK firms, and we check every fact against its source on the date shown. Read how we review, or tell us if something has changed.
