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Explainer

How do staffing agencies make money? Markups, bill rates and pay

Where the money goes between what a client pays and what you earn on an event shift, with a worked example on a $25 hourly rate.

The short answerStaffing agencies make money on the gap between the bill rate they charge the client and the pay rate they pay you. That markup first covers employer payroll taxes, workers' comp, insurance, recruiting, scheduling and payroll. What remains, often a few percent of the bill rate, is profit.

How do staffing agencies make money? They charge the client an hourly bill rate that is higher than the pay rate they give you. The gap, called the markup, pays the employer taxes, insurance, recruiting, scheduling and payroll costs, and what is left over is the agency's profit. That profit is usually a small slice of the bill rate, not the whole gap.

This guide walks through the math with real numbers, shows where event staffing differs from office or warehouse temp work, and lists the questions to ask, whether you work the shifts or book them. If you are new to the work itself, start with what event staff do.

Bill rate vs pay rate: what each one means

Pay rateWhat the agency pays you per hour worked. It is the number on the job post and on your pay stub before withholding.Set by the agency, shaped by local wages and the roleTips, where allowed, are on top of it
Bill rateWhat the agency charges the client per hour you work. It covers your pay plus every cost of employing you, plus the agency's margin.Usually quoted to the client, not to workersCan include overtime, holiday or short-notice multiples

The markup is the difference, written as a percentage of the pay rate: (bill rate − pay rate) ÷ pay rate. A $20 pay rate billed at $30 is a 50% markup. The gross margin is the same gap as a share of the bill rate: $10 of $30 is about 33%. Agencies talk in both, so check which one a number means.

What the staffing agency markup covers

Most of the markup is spent before the agency earns anything. When the agency is your W-2 employer, it owes these costs on every hour you work:

Costs an agency pays as your employer
CostRateNotes
Employer Social Security6.2% of wagesUp to the yearly wage base ($184,500 in 2026)
Employer Medicare1.45% of wagesNo wage cap. Together with Social Security, 7.65%
Federal unemployment (FUTA)0.6% effective6.0% on the first $7,000 per worker per year, less up to a 5.4% credit for state unemployment tax
State unemployment (SUTA)VariesSet by state law; rates and wage bases differ by state and by employer
Workers' compensationVariesInsurance for on-the-job injuries, run under state programs; priced by job type
Liability insurance, screening, payrollVariesBusiness costs, not set by law
Source: Topic no. 751, Social Security and Medicare withholding rates · As of Oct 2026

Federal rates come from the IRS on Social Security and Medicare and the IRS on FUTA. State unemployment and workers' compensation rates depend on where you work, so check the state agency for exact figures.

After the legal costs, the rest of the markup pays for running the business:

  • Recruiting and screening: job posts, interviews, background checks, onboarding paperwork.
  • Scheduling and dispatch: confirming staff, handling call-outs, sending replacements.
  • Payroll and billing: cutting paychecks on time even when the client pays the agency weeks later.
  • Overhead: office staff, software, uniforms kept on hand, insurance beyond workers' comp.
  • Profit: what is left.

How big is the markup? It varies widely by job type, state and how hard the role is to fill, and agencies rarely publish their rates. One reference point: an American Staffing Association fact sheet built on its benchmarking survey used a $17 pay rate marked up 51.5% to a $25.76 bill rate, with net profit of about 3.3% of the bill rate, roughly 85 cents an hour. The figures date from 2019, so treat them as a model of how the money splits, not a current price.

How staffing agencies make money on a $25 an hour shift

Worked example

A $25/hr pay rate billed at an assumed $37.50/hr (a 50% markup)

  1. Your pay: $25.00

    Paid to you for every hour worked. Your own share of Social Security and Medicare (also 7.65%) and income tax are withheld from it, as with any W-2 job.
  2. Employer FICA: $1.91

    7.65% of $25.00, the employer's share of Social Security and Medicare.
  3. FUTA: $0.15

    0.6% of $25.00, and only until you have earned $7,000 from that agency in the year.
  4. State unemployment: $1.00

    Assumes a 4% rate, the figure in the ASA example. Your state's rate will differ.
  5. Workers' comp: $0.50

    Assumes 2%. Bartending, serving and stage work are priced differently, and rates vary by state.
  6. Overhead: $7.70

    Recruiting, scheduling, payroll, insurance and office costs. Assumed, sized so profit matches the ASA example.
  7. Profit: $1.24

    3.3% of the $37.50 bill rate, the net margin in the ASA example.

Add it up and the agency keeps about $1.24 of the $12.50 gap. Change one assumption, such as a higher workers' comp rate or a client who pays late, and that number moves quickly.

Here is what the same 50% markup would look like on median pay for three common event roles, using pay from shifts listed on our site. The bill rates are an illustration, not quotes from any agency.

Event roles: listed pay and an illustrative bill rate
RolePay range (median)Bill rate at an assumed 50% markup on the median
Bartender$20–38 ($26) + tips$39.00
Brand ambassador$20–34 ($25)$37.50
Banquet server$18–30 ($22)$33.00
Source: Shifts listed on eventstaffing.com · As of Sep 2026

Pay for other roles is on the event pay page.

Other ways staffing agencies make money

The hourly markup is the main income, but event agencies often bill in other ways too. Not every agency uses all of these; they show up in the client contract.

  • Flat event or booking fees: a set charge per event for planning the staffing, on top of the hourly rate.
  • Minimum hours: the client pays for a minimum shift length even if the event wraps early. Whether you are paid the same minimum depends on the agency, so ask.
  • Overtime and holiday billing: under federal law, non-exempt employees earn time and a half for hours over 40 in a workweek, and some states add daily overtime. Agencies usually bill the client a higher rate for those hours.
  • Rush or short-notice rates: a premium for bookings made close to the event.
  • Travel and parking: mileage, travel time or lodging for out-of-town events, passed through or marked up.
  • Direct-hire or conversion fees: if a client hires a worker permanently, the contract may charge a one-time fee.

How event staffing agencies differ from office and industrial staffing

An office temp agency might place someone for months. An event staffing agency fills hundreds of short shifts, often for one night, which changes where the money goes:

  • Short notice: clients add headcount days or hours out, and the agency has to find people who can make the call time.
  • Short shifts: recruiting and paperwork cost the same whether you work four hours or four months, so the cost per hour worked is higher. Minimum shift lengths help cover it.
  • Uniforms and kit: black-tie attire, branded shirts for a brand activation, bar tools.
  • Last-minute fill and no-shows: a no-call, no-show on a 300-guest gala is the agency's problem to fix. Keeping standby staff and paying leads to make calls is part of the overhead.
  • Tips and certifications: alcohol service certifications, tip handling and venue rules add admin.

What it means for you as an event worker

If you are a W-2 employee of the agency, the agency does not take a cut of your pay. The pay rate you agreed to is what you earn; the margin sits on top, in what the client pays. The only deductions should be normal withholding and anything you agreed to in writing.

If you are paid on a 1099 as an independent contractor, it works differently: no one withholds taxes, and you pay both halves of Social Security and Medicare yourself through self-employment tax. Read W-2 vs 1099 for event staff before you take the gig, and ask a tax professional if your situation is unclear.

Before you accept a shiftAsk three things: am I W-2 or 1099, is there a minimum paid shift, and how are tips handled. Get the answers in writing or in the app.

Questions to ask a staffing agency

If you work the shiftsAm I a W-2 employee or a 1099 contractor?Is there a minimum number of paid hours if the event ends early?Do I get paid for travel time between venues, or for training?Who keeps the tips, and is there a tip pool or tip-out?When is payday, and how do I see my hours?Do I pay for my own uniform or certification?
If you book the staffWhat is the hourly bill rate per role, and what does the worker earn?Is there a minimum shift length or a booking fee?How are overtime, holidays and rush bookings billed?What happens if someone does not show: who replaces them, and do you bill for the gap?Are workers W-2 employees covered by your workers' comp and liability insurance?Is there a fee if we hire someone directly?

Common misconceptions

The agency takes a percentage of my pay.For W-2 staff, the markup is added to what the client pays. Your agreed rate is your pay before normal withholding.
The whole markup is profit.Most of it goes to employer taxes, insurance and running costs. In the ASA example, net profit was about 3.3% of the bill rate.Source: Staffing pricing explained: what goes into a staffing company's bill rate (reproduces an American Staffing Association fact sheet based on its Staffing Operations Benchmarking Survey)
A higher bill rate means higher pay for workers.Not always. Rush fees, travel and overtime multiples raise the bill rate without changing your base rate. Ask what you earn, not what the client pays.

Ready to see what event shifts pay near you? Browse open shifts.

Questions people ask

If you are a W-2 employee, nothing comes out of your agreed pay rate except normal tax withholding and deductions you agreed to. The agency earns its margin from the higher rate it bills the client. Ask the agency to confirm this in writing.

Sources1Topic no. 751, Social Security and Medicare withholding rates — Internal Revenue Service, 20262Topic no. 759, Form 940, Employer's Annual Federal Unemployment (FUTA) Tax Return — Internal Revenue Service, 20263Unemployment insurance tax topic — U.S. Department of Labor, Employment and Training Administration, 20264Workers' compensation — U.S. Department of Labor, 20265Overtime pay — U.S. Department of Labor, Wage and Hour Division, 20266Staffing pricing explained: what goes into a staffing company's bill rate (reproduces an American Staffing Association fact sheet based on its Staffing Operations Benchmarking Survey) — Advent Talent Group / American Staffing Association, 20237Shifts listed on eventstaffing.com — eventstaffing.com, 2026
Raghav V., Lead Organic Market Researcher