What Does It Really Cost to Hire a Temp, and What’s Included in That Rate?

When you’re thinking about bringing in a temporary worker, one of the first questions that comes to mind is, “What will it actually cost me?”

It’s a fair question. Hiring temps can feel like a grey area — you see a charge-out rate, but you might not be clear what’s behind it. Is it just the worker’s pay? What else is baked in? And most importantly, are you really getting value?

Let’s break it down.

The Two Parts of a Temp’s Hourly Rate

When you receive a quote from a recruitment agency for a temporary worker, the figure usually includes two broad elements:

1. The worker’s pay and employment costs

This is what the temp actually earns, plus all the statutory costs an employer has to cover. That includes:

• Hourly pay rate (based on skills, market rates, and experience)

• Holiday pay (temps still accrue holiday)

• Employer National Insurance contributions

• Employer pension contributions

• Statutory costs such as SSP and SMP

2. The agency’s fee

This covers the work the agency does to find, screen, and manage the worker. It’s not just about “sending over a CV”. It usually includes:

• Advertising and sourcing candidates

• Pre-screening, interviewing, and referencing

• Right-to-work checks and compliance

• Payroll processing each week or month

• Ongoing HR support, dealing with queries, issues, or replacements if needed

• Insurance and liability cover

So, What Does That Mean in Practice?

Say you’re quoted £20 per hour for a temp. That doesn’t mean the worker pockets £20. Here’s a real example based on a temp who earns £13 per hour:

A Worked Example: If a Temp Is Paid £13/hour

Estimated client charge-out rate: £19.70 – £20.15 per hour

So while the worker themselves is paid £13/hour, by the time you add in holiday, NI, and pension, statutory costs alone push that to nearly £16/hour. The agency’s margin (around £2.50–3.00) is the smallest slice, but it covers all the admin, compliance, and risk — so you don’t have to.

What’s the Value You’re Really Paying For?

The real benefit isn’t just having someone in the seat quickly. You’re paying for:

• Speed – a ready-to-go worker when you need them most.

• Reduced risk – if the person isn’t right, the agency replaces them.

• Flexibility – no long-term commitment, you only pay for the hours worked.

• Compliance – peace of mind that all the legal boxes are ticked.

The Bottom Line

Hiring a temp might look like the cheapest option at initial glance, but once you factor in onboarding, holiday, sick pay, and all the statutory obligations, the picture changes.

What you’re really paying for is a worker who’s ready to hit the ground running, plus the reassurance that compliance, payroll, and replacement cover are all taken care of. Viewed in that light, the rate starts to look like real value.