Help Me Work

Staffing Agency

Other Employer of Record Services

Payment Services

Pay you before client pays

Yes
(upon credit approval)

Sometimes

No

Pay frequency

Weekly unless client requires Bi-weekly

Weekly & Bi-weekly

Weekly, Bi-weekly & sometimes monthly

Employee Benefits

401(k)

Yes

Not Usually

Yes

Mandatory profit sharing

No

No

Yes (5% to 10% required with some services)

Fees

Type of fee model

Pay Rate + mark up

Pay Rate + mark up

% on Gross Billings

Percentage

3% - 11% depending on service requested. Net rate after employer cost is used to calculate markup. Employer costs are on average 12%

18% - 30% depending on agency

3.5% to 7%

Pros for this fee model

Easy to calculate bill rate to client (pay rate times mark up)

Easy to calculate bill rate to client

Pay actual employer taxes

Cons for this fee model

Not paying actual employer costs but rather averages

Fee includes cost of staffing agency overhead that deliver no value unless they find you work; the agency keeps more of your profit

Even though 3.5% sounds cheaper, your take home pay could be less after all the costs are calculated; they use a complex system to be able to compare to others

Pay for billable expenses

Yes

Yes

Yes

Pay for non-billable expenses (such as commuting, home internet connection, meals)

No – too much potential exposure with IRS

No

Yes by using complicated business centers