If you have never used a recruitment agency before — or if you are reviewing your current supplier agreements — understanding how agency fees work is essential. The UK recruitment industry is not regulated by a single pricing body, so rates vary significantly by sector, seniority, and commercial model. Knowing the norms protects you from overpaying and helps you evaluate whether you are getting genuine value.

This guide covers the main fee structures used by UK recruitment agencies in 2026, typical rates by sector, what is included (and what is not), and the questions you should ask before signing any agency terms of business.

The Two Main Fee Structures

1. Percentage of Salary (Permanent Placements)

For permanent recruitment, most UK agencies charge a placement fee expressed as a percentage of the candidate’s first-year gross salary. The fee is typically due when the candidate starts employment (or sometimes when an offer is accepted — check the contract carefully).

2. Hourly Markup (Temporary Staffing)

For temporary staffing, agencies charge an hourly rate to the client that is higher than the rate paid to the worker. The difference is the agency’s gross margin, from which it covers employer’s NI (13.8% on earnings above the secondary threshold), holiday pay accrual (typically 12.07%), payroll administration, compliance costs, and its own profit margin.

A typical agency margin on temporary healthcare workers is 20–30% above the worker’s hourly pay. In hospitality and logistics, margins tend to be tighter (15–22%) due to higher volume and more commoditised supply. In specialist clinical roles — RGN, RMN, Allied Health — margins can be higher, reflecting the compliance investment.

What Is Included in the Fee?

Permanent Placement Fees — What’s Covered

• Advertising and job board spend
• Candidate sourcing, screening, and shortlisting
• Reference collection and verification
• Right to work checks
• Interview scheduling and candidate management
• Offer management and negotiation support
• Typically: a rebate period (8–12 weeks) if the candidate leaves

Temporary Staffing Rates — What’s Covered

• Worker pay at the agreed rate
• Employer’s National Insurance contributions
• Holiday pay accrual and statutory entitlements
• DBS checks and compliance documentation (at a reputable agency)
• Payroll processing and HMRC reporting
• Out-of-hours account management for urgent cover

Note: some lower-cost agencies pass compliance costs (DBS, training certificates) back to the client as extras. Always clarify this upfront. AESN includes all compliance costs within its standard rates.

Retained vs Contingency Search

For senior roles, you may encounter two different engagement models. Contingency recruitment means the agency only earns a fee if the placement is made — there is no upfront cost and you can use multiple agencies simultaneously. Retained search means you pay a portion of the fee upfront (typically one-third) to secure exclusive, in-depth sourcing by a dedicated consultant. Retained search is appropriate for head of department, director, and C-suite level roles where passive candidates need to be approached directly.

Negotiating Agency Fees

Fee rates are negotiable — particularly for volume relationships or preferred supplier agreements. If you are placing multiple roles or intend to use the agency consistently across sites, a volume discount of 1–3 percentage points on permanent fees is reasonable to request. For temporary staffing, framework agreements with capped rates are standard in the NHS and local government, and are increasingly common in education and social care.

AESN offers transparent rate structures and is happy to discuss volume arrangements, master vendor agreements, and framework pricing for clients with consistent ongoing requirements.

What to Check Before Signing Agency Terms of Business

1. What is the exact fee percentage and what salary definition does it apply to (basic, OTE, total package)?
2. When does the fee become due — offer acceptance, start date, or after a qualifying period?
3. What is the rebate schedule if the candidate leaves? How long and on what terms?
4. Are compliance costs (DBS, training) included in the rate or charged separately?
5. Is there an exclusivity clause, and if so, for how long?
6. What are the notice and termination terms for the supply agreement?

Contact AESN for a clear, no-obligation fee proposal: info@aesn.co.uk | 020 8064 0457