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.