Free staffing metric calculator
Staffing gross margin calculator
Calculate staffing gross profit, gross margin percentage, markup on direct cost, and the bill amount needed for your own target margin.
Use a reporting period, hourly figures, or a shift. Revenue and every direct-cost component must cover the same basis and follow the definition agreed by your finance team.
No signup required
Calculate staffing gross margin and markup
Enter revenue, worker pay, employment on-costs, programme fees, and any other costs included in your agency's confirmed definition. Calculations run in your browser; calculator analytics exclude the numbers you enter and the results.
Your calculation
This calculator provides general educational arithmetic, not accounting, tax, payroll, legal, or financial advice. Confirm revenue recognition and the costs included in gross profit with your finance team or adviser.
Staffing gross margin formula
Start with the gross profit amount:
Gross profit = staffing revenue − defined direct costs
Then divide gross profit by revenue:
Gross margin % = (gross profit ÷ staffing revenue) × 100
If recognised staffing revenue is 100,000 and defined direct costs are 75,000, gross profit is 25,000 and gross margin is 25%.
((100,000 − 75,000) ÷ 100,000) × 100 = 25%
Calculate a bill amount from your target staffing gross margin
Enter your agency's own target to estimate the bill amount required for the direct costs in the calculator. No target is supplied or implied.
Target bill amount = total direct costs ÷ (1 − target gross margin % ÷ 100)
For 75,000 in direct costs and a 25% target gross margin, the required bill amount is 100,000. Confirm the resulting rate is commercially and contractually appropriate before using it.
Gross margin and markup are not the same
Both percentages use the same gross profit, but their denominators differ. That means they cannot be substituted for one another.
Gross margin
Gross profit ÷ revenue × 100
Margin describes gross profit as a percentage of staffing revenue. In the 100,000 revenue and 75,000 cost example, margin is 25%.
Markup
Gross profit ÷ direct cost × 100
Markup describes gross profit relative to direct cost. Using the same figures, markup is 33.33%.
Adding a 25% markup to direct cost does not create a 25% gross margin. A 25% margin requires revenue to be high enough that gross profit equals 25% of revenue.
Decide what counts as a direct cost
Worker pay alone may not be the full direct cost of delivering staffing work. Depending on the agency, engagement model, jurisdiction, service line, and accounting policy, the definition may also include employment on-costs, leave, pension or superannuation, insurance, taxes, programme fees, or other directly attributable costs.
The calculator separates common inputs so worker pay is not mistaken for the entire cost base. It still does not prescribe which items your agency should include. Use the finance team's confirmed definition, apply it consistently, and document changes before comparing clients, desks, roles, or periods.
Scissors can help agencies prepare structured timesheet, pay-rule, billing, expense, and worker data for downstream payroll and finance systems. It does not replace the accounting judgement behind a gross-margin definition.
Use the same basis on both sides of the calculation
The calculator works for different operating views as long as revenue and direct costs cover the same scope.
Per hour or shift
Compare a bill amount with the fully defined direct cost for that same hour or shift. Do not compare an hourly bill rate with a weekly cost.
Client or service line
Use recognised revenue and attributable direct costs for the same client, programme, desk, role group, or service line.
Reporting period
Align the revenue and cost period, then reconcile late timesheets, adjustments, credits, and unapproved work before treating the result as final.
Segment the result before acting on it
An agency-wide percentage can hide why gross margin changed. Review consistent segments such as client, service line, role, location, rate card, assignment type, overtime mix, programme or VMS fee, and approval status.
Use operational measures alongside the commercial result. Fill rate shows how much demand was covered, while time to fill shows how quickly demand moved. Worked and approved time helps explain whether the revenue and cost inputs are complete.
Staffing gross margin calculator FAQs
What is the gross margin formula for a staffing agency?
Subtract defined direct costs from staffing revenue to get gross profit. Divide gross profit by staffing revenue and multiply by 100 to calculate the gross margin percentage.
Is staffing markup the same as gross margin?
No. Markup divides gross profit by direct cost, while gross margin divides gross profit by revenue. The percentages differ even when they use the same revenue and cost figures.
Can I calculate margin from bill rate and pay rate?
You can use consistent per-hour or per-shift figures, but worker pay may not represent every direct cost. Confirm which employment on-costs, programme fees, insurance, or other attributable costs belong in your agency's definition.
What is a good gross margin for a staffing agency?
There is no universal figure for every agency, service line, market, role, or accounting definition. Compare consistently calculated segments against the agency's own history and commercially agreed objectives.
Make the underlying staffing data easier to reconcile
Scissors connects staffing workflows through worker and client timesheets, approval steps, configurable rate rules, and payroll-ready export shapes for the systems your agency already uses.