by Emilie Skaug
When it comes to the staffing industry, two terms that we consider essential are bill rates and pay rates. But what’s the difference between the two, and why are they important for staffing?
Don’t worry. We’ll answer any questions you may have in this article, where we deep-dive into bill rates vs. pay rates and what they mean for our industry.
RELATED: What Goes Into Staffing Agency Costs?
Defining Bill Rates and Pay Rates
Before we get into factors that influence bill and pay rates, and the importance of both within the staffing industry, first we need to define what these terms mean.
A bill rate is the total amount a client pays a staffing agency for a worker’s services, per hour or other designated pay period.
A pay rate is the wage a worker earns per hour, week, or other designated pay period.
A lot goes into the bill rate beyond just the worker’s pay rate. Yes, the difference between the two includes a staffing firm’s profit, but it also covers expenses beyond pay rate. Before we dive into that, first let’s look at what variables affect pay rate.
Factors That Influence Pay Rate
There are various elements that can influence the pay rate of a certain worker. Things like job title, job responsibilities, and required experience, expertise, skills, or certifications are obvious—a leadership role’s pay rate will be higher than the pay rate for an entry-level position.
What about the less clear factors? Even if they aren’t top of mind, those are important too. The pay rate can be affected by the location of the company or the role (after all, a job in New York City will offer more than the same position in rural Iowa to factor in the increased cost of living).
Another more subtle influence is market conditions, as pay rates can change based on the current unemployment rate or salary trends. It’s important for the pay rate to adequately reflect the overall job market.
What Comprises the Bill Rate?
When coming up with the bill rate for a worker, what goes into the final number? This will typically include the pay rate, payroll taxes like Social Security or Medicare, any benefits offered like PTO or health insurance, and onboarding and training of the worker.
Basically, the bill rate is made up of all the costs that go into finding and hiring talent for a client. Any additional client services or rush fees for quickly sourcing quality talent can also factor into the bill rate.
Looking For Hiring Help?
Now that you’ve learned more about bill rates and pay rates, maybe you feel more ready to start your own partnership with a staffing company. If that’s the case, we’re here to help!
We’ve got over 20 years of experience in staffing quality talent and the expertise to find the candidates you need. Contact Insight Global today to discuss how we can make your hiring process easier.
by Anna Morelock 
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