What is Markup?

Markups are an additional fee for clients, calculated as a percentage of the pay rate. Markups generally consist of three elements:

• Pass through costs that adjust over the contract (employment taxes)
• Fixed pass through costs (agreed to costs, such as worker’s comp, insurance, etc.)
• Gross profit (for the recruiting firm)

The exact markup depends on a variety of factors—types of workers and skill sets, market demand, buyer’s knowledge, duration of assignment, volumes of business, etc.—and can vary greatly.