How recruitment agency fees and recruiter commission work
Recruitment agency fees are paid by the employer, not the candidate, and a permanent placement fee is generally a percentage of the new hire's annual compensation. The recruiter personally keeps a share of that fee through a commission plan. No major firm publishes its percentage, so the number lives in your terms of business.
Follow the money, one placement at a time
- Terms are agreed before anyone is introduced The fee basis and the refund or rebate scale are written down first. In the UK, Regulation 17 of the Conduct Regulations 2003 requires a hirer's terms to cover both in a single document. Settle now what counts as an introduction, and for how long it counts.
- The agency searches, screens and submits This is the work you are buying. Robert Half states in its annual report that price and the reliability of service are the most significant competitive factors, both often a function of the availability and quality of personnel.
- You hire, and the fee is invoiced to you Robert Half's annual report states that fees for successful placements are paid only by the employer and are generally a percentage of the new employee's annual compensation. Ask whether annual compensation means base only, or base plus bonus and equity.
- The recruiter is paid a share of the fee Weeks or months later, a commission plan pays the individual recruiter part of what the agency billed. They are paid on a share of the fee, not on the fee itself.
What a recruitment agency fee is
Recruitment agency fee A sum paid by the employer to an agency for a successful hire. For a permanent placement it is generally calculated as a percentage of the new employee's annual compensation, as Robert Half describes the mechanism in its annual report.
Contract and temporary work is billed a different way. The customer pays a fixed hourly rate only for hours worked, and the workers are employees of the staffing firm and are paid by it. The markup is the gap between those two rates.
Why nobody publishes the placement fee percentage
Search for what agencies charge and you will meet the same range on page after page, always stated and never sourced. The two largest listed players describe the mechanism precisely in documents filed under penalty of law, and neither discloses a contingency percentage. Robert Half's own homepage carries no price at all.
There is a reason for the silence, and it is in the filings. Price competes against the reliability of service, and both depend on the availability and quality of the firm's people. Two firms quoting the same percentage are not selling you the same thing, so the percentage is negotiated per engagement rather than published.
The 4 ways agencies charge, and what each one buys
| Model | Who pays, and when | What the number is based on | What you are buying |
|---|---|---|---|
| Contingency permanent placement | The employer, only if you hire someone the agency put forward. | A percentage of the new employee's annual compensation. No major firm publishes the percentage. | Candidates at your risk to the agency. They carry the cost of every search that goes nowhere. |
| Retained executive search | The employer, in instalments, whether or not you hire the candidate they found. | Heidrick and Struggles states in its annual report that the retainer is approximately one-third of estimated first-year compensation. | A committed, generally exclusive search for one senior seat, with the firm paid for the process. |
| Contract and temporary | The employer, hourly, for hours worked. | A fixed hourly bill rate. The worker is an employee of the staffing firm and is paid by it. | Capacity you can switch off, with the staffing firm employing and paying the worker throughout. |
| Temp to perm conversion | The employer, once, when a contractor becomes your employee. | A one-time conversion fee set in your terms of business. | The right to keep someone you have already worked with, rather than start a search. |
Who pays, in the plainest words anyone has filed
Robert Half states in its FY2025 annual report: "No fee for placement services is charged to employment candidates." If someone asks a job seeker for money to find them work, that is the moment to check the local rules.
Does the recruiter get commission? It depends who they work for
| Type of recruiter | Paid commission on placements? | How the pay is usually built |
|---|---|---|
| Agency or contingency recruiter | Yes, typically. | A base salary plus a commission plan paying a share of the fees they bill. The share is set by the employer, not published. |
| Retained executive search consultant | Usually, tied to search fees and to winning the work. | No major listed search firm discloses how its consultants are compensated, so treat any stated split as somebody's estimate. |
| Internal or in-house recruiter | Usually no per-placement commission. | Salary plus whatever company-wide bonus scheme applies. No financial stake in any single offer being accepted. |
| Contract or temp desk recruiter | Yes, normally on margin rather than on a placement fee. | A share of the gross margin on hours billed, which is the gap between the bill rate and the pay rate. |
How much do recruiters earn once the commission lands?
There is no federal wage series for agency recruiters specifically, which is why most recruiter salary range content leans on self-reported salary sites for recruiter wages and recruiter salaries. BLS counts recruiters inside human resources specialists. Its May 2025 figures put the median annual wage at $75,940, with the lowest 10 percent under $47,180 and the highest 10 percent above $128,720.
Now the number that argues with the genre. Within employment services, which is where agencies sit, the BLS May 2025 median is $60,550. That is the lowest of the industries BLS breaks out for this occupation, and below the all-industry median rather than above it. Commission raises the ceiling for a strong desk. It does not raise the middle.
What to pin down before you sign anything
- Does annual compensation mean base only, or base plus bonus, equity and sign-on
- What is the refund or rebate scale if the hire leaves, and over what window
- What counts as an introduction, and for how long does that claim last
- Is the engagement exclusive, and for which roles and which period
- What is the temp to perm conversion fee, and how is it calculated
- For contract, what is the bill rate and what is the pay rate
- Who owns candidate data once the assignment ends
- Is all of this in one written document, agreed before any work starts
Recruitment fee disputes, and the rules that decide them
Recruitment agency fee disputes come in three recurring shapes. The candidate was already in our ATS. Two agencies claim the same introduction. The hire left in week 6 and the invoice is still due. None of them is settled by what is normal in the market. All three are settled by the written terms, which is why the clause you skipped matters more than the percentage you negotiated.
In the UK, Regulation 17 of the Conduct Regulations 2003 requires terms with a hirer to sit in one document stating the fee basis and the scale of any refunds or rebates. Section 6 of the Employment Agencies Act 1973 prohibits charging a work seeker a work-finding fee, except in cases the Secretary of State prescribes. Enforcement now sits with the Fair Work Agency.
In the US this is state law rather than federal law. New York requires an employment agency to hold a licence for each location, and General Business Law section 185 caps the fees an agency may charge an applicant, with different limits by class of employment. None of this is legal advice, and your own terms of business govern.
When an introduction fee is contested
Do
- Pull the signed terms and read the introduction clause before anyone writes an email
- Date every contact you already had with the candidate, from your own records
- Check whether the agency is REC registered, whose code requires fees disclosed before an assignment is accepted
- Put your position in writing, quoting the clause rather than the custom
Do not
- Arguing about what the market normally does, which decides nothing
- Paying an invoice with no matching written term behind it
- Interviewing a disputed candidate again before the claim is resolved
- Assuming the UK transfer fee rules apply to a US placement
What the fee is actually buying
A plain-English brief read into structured filters, then searched and judged against the role's bar.
Strip the invoice back and an agency fee pays for two things: reach into people who are not applying, and the work of judging them against your bar. A team can buy those two things directly instead.
Doing the finding and the screening yourself
The Cognitive searches across ~900M profiles from a one-line brief, split into filters about the person and about their current employer. Identities stay masked until you reveal a contact, and a verified email or phone reveal is charged only when it succeeds. Everyone found for a role stays in that role's pool and is excluded from later searches, so the shortlist is durable.
After that, a live two-way AI interview returns a recording, a transcript and a scorecard with each criterion scored out of 5 and an overall score out of 100. The honest limit: some senior or scarce roles will still justify the fee, and nothing here touches agency billing, submittals or client management.
Evidence instead of a submittal
A scorecard from a completed interview: criteria scored, an overall out of 100, and resume claims checked.
An agency shortlist arrives as somebody's opinion, and you pay for it either way. This arrives as a recording, a transcript and a scorecard you can read for yourself. You can run one on a role of your own from the try interview page.
Keep reading
Choosing a staffing or recruiting firm · Executive search firms · Recruitment process outsourcing · Software for staffing agencies
Frequently asked questions
How much do recruiters charge?
For a permanent hire, a share of the new employee's annual compensation, paid by the employer only when the placement succeeds. Heidrick and Struggles states in its annual report that retained search is typically paid a retainer of approximately one-third of estimated first-year compensation. No major firm publishes a contingency percentage, so that number is negotiated per engagement and belongs in your terms of business.
Do recruiters get commission, and do recruiters get paid commission on every placement?
Most agency recruiters do. The usual shape is a base salary plus a commission plan paying a share of the fees they bill, with the share set by their employer rather than published, so no commission plan sample you find online will match your own. Internal recruiters usually have no per-placement commission. Contract desks are typically paid on the gross margin of hours billed.
Do recruiters get paid per hire, and how much do recruiters make per hire?
Agency recruiters are paid when a placement succeeds, but through a commission plan that pays a share of the agency's fee rather than the fee itself, often weeks after the client settles the invoice. How much they make in commission depends on a split their employer sets and does not publish, so treat any stated figure as an estimate. Retained search is paid in instalments either way.
Do internal recruiters get commission?
Usually not in the form of a per-placement commission. In-house recruiting pay is generally a salary plus whatever company-wide bonus scheme applies. The consequence matters to candidates: an internal recruiter has no personal financial stake in any single offer being accepted, which is the structural difference between them and an agency recruiter.
How much do recruiters earn?
BLS counts recruiters inside human resources specialists. In May 2025 the median annual wage for that occupation was $75,940, with the lowest 10 percent under $47,180 and the highest 10 percent above $128,720. Within employment services, where agencies sit, the median was $60,550. For a recruitment job salary or a recruiter pay rate in your own market, use real salary data rather than a blog table.
Who pays the recruitment agency fee, the employer or the candidate?
The employer. Robert Half states in its FY2025 annual report that fees for successful placements are paid only by the employer, and that no fee for placement services is charged to employment candidates. In the UK, charging a work seeker a work-finding fee is prohibited except in narrowly prescribed cases. In the US it is state law: New York caps applicant-paid fees by class of employment.
What happens to the fee if the hire leaves?
It depends entirely on the refund or rebate terms agreed in writing before the work started. In the UK, Regulation 17 of the Conduct Regulations 2003 requires a hirer's terms to state the circumstances in which refunds or rebates are payable and the scale of them. There is no market-standard period to fall back on, so find the clause in your own terms.
Can an agency charge a fee if we hire the contractor permanently?
Often yes, as a one-time conversion fee. In the UK, Regulation 10 of the Conduct Regulations 2003 makes a transfer fee unenforceable unless the hirer is offered the alternative of electing an extended period of hire of a length specified in the contract. It is also unenforceable once employment starts after the later of 8 weeks from the last assignment or 14 weeks from the first. Those rules are UK only.
How do I dispute a recruitment agency fee?
Start from the written terms, because that is what decides it rather than market custom. Recruitment introduction fee disputes and missed recruiting fees turn on what your contract says counts as an introduction. In the UK, enforcement now sits with the Fair Work Agency, and the REC Code of Professional Practice requires members to disclose all fees and charges to clients before an assignment is accepted. In the US, check state rules.
Do military recruiters get commission?
Military recruiting pay does not work like an agency commission, and we will not state the detail from memory. Enlisted and officer pay, along with any special or incentive pays that attach to recruiting duty, are published by the Department of Defense rather than negotiated per placement. Check the official Department of Defense military pay site and the relevant service branch for what currently applies.
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