How is a direct hire recruitment fee calculated?

A direct hire recruitment fee is calculated by multiplying the candidate's first-year annual base salary by the agreed placement fee percentage (typically 20% to 25%). For example, a $100,000 salary at a 20% fee yields a $20,000 placement invoice.

What is a typical recruiter commission split on direct hire placements?

Full-desk agency recruiters typically earn a commission split between 30% and 50% of the gross fee collected by the staffing agency, while split-desk models (one recruiter sourcing, one account manager client-facing) usually divide 40% to 50% between both contributors.

What is a replacement guarantee clause in staffing contracts?

A replacement guarantee clause (typically 60 to 90 days) stipulates that if the placed candidate resigns or is terminated for cause within the guarantee window, the agency must provide a qualified replacement candidate at no extra cost or provide a prorated refund credit.

Staffing Agency Placement Fee & Recruiter Commission Calculator

Candidate & Fee Parameters

Candidate 1st-Year Annual Base Salary

Standard full-time starting base salary.

Agency Placement Fee Percentage 20%

Standard US contingency fee is 20% to 25% (15% for high-volume, 30%+ for executive search).

Recruiter Desk Commission Split 35%

Percentage of the gross placement fee paid to the 360 recruiter or biller.

Guarantee Replacement Period

Target Placements per Year (Goal Modeling)

deals / yr

Typically 1 to 2 direct-hire placements per month for full-desk recruiters.

Total Gross Placement Fee

$0.00

Based on 20% of $120,000 base salary

Revenue Distribution	Amount per Placement
Recruiter Commission (35% split)	$0.00
Agency Retained Revenue	$0.00
Annual Billings Generated (12 placements)	$0.00
Recruiter Annual Commission Take-Home	$0.00
Agency Annual Retained Gross Margin	$0.00

Guarantee Proration Schedule (90 Days)

Days 1 - 30: 100% replacement or refund liability ($0.00)

Days 31 - 60: 66% replacement credit liability ($0.00)

Days 61 - 90: 33% replacement credit liability ($0.00)

Day 91+: 0% liability (Placement fully vested)

How Direct-Hire Placement Fees Work in US Recruiting

In direct-hire (permanent placement) recruitment, the employer pays the staffing agency a one-time contingency or retained fee based on a percentage of the candidate's first-year negotiated base salary. Unlike contract/temp staffing where the agency bills weekly on hours worked, direct-hire fees are invoiced upon the candidate's first day of employment.

Standard Contingency Fee Percentages

15% to 18%: High-volume corporate roles, entry-level, or exclusive multi-hire vendor agreements.
20% to 25%: The US staffing industry benchmark for senior software engineers, healthcare clinicians, and specialized technical roles.
30% to 35%: Retained executive search for VP, C-suite, and leadership positions.

Recruiter Desk Split Averages

Agency recruiters who source, qualify, and close direct-hire placements typically receive between 25% to 50% of the gross fee. The agency retains the remaining 50% to 75% to cover office rent, sourcing tools (LinkedIn Recruiter licenses), payroll admin, and business profits.