Placement fee
A placement fee is what a client pays an agency when a candidate it introduced accepts a permanent job. In the UK it is usually a percentage of first-year base salary, typically 15 to 25 per cent, invoiced on the start date and protected by a rebate or replacement clause.
The percentage is only half the calculation. The other half is what counts as salary, and that is defined in the terms of business, not in the offer letter. Some terms charge on base salary alone. Others charge on first-year remuneration, which can pull in guaranteed bonus, car allowance and sign-on payments. Specialist and senior roles tend to sit at the top of the range, volume roles at the bottom, and some clients negotiate a flat fee or a sliding percentage by salary band in exchange for a steady flow of roles.
A worked example. A candidate accepts a role at £60,000 base with a guaranteed £5,000 first-year bonus. At 20 per cent of base the fee is £12,000 plus VAT, so the invoice is £14,400. If the terms define the fee on first-year remuneration, the fee is £13,000 plus VAT. That £1,000 difference is decided by one clause, and it is the clause most often checked for the first time when the client queries the invoice.
The fee is usually invoiced when the candidate starts, not when they accept, and paid on the client's terms, commonly 14 days for UK perm work and 30 for larger clients. It is not money in the bank until the rebate period has passed: if the candidate leaves in the first weeks, part of it goes back. That matters for anything calculated off the invoice, including commission and the month's reported revenue.
Fees also arise from hires the agency did not directly make. Most terms say a fee is due if the client hires an introduced candidate into a different role, hires them later within the introduction period, or passes their details to another company that hires them. In each case the fee is normally calculated on the salary of the job actually taken, not the one the candidate was put forward for, which is why the terms need a definition of salary that works for any role.
Where it goes wrong in practice: the fee was agreed on a call and never written into the terms; the salary on the invoice is the figure from the brief rather than the one in the signed offer; a candidate accepts, the invoice is raised early, and they never start; or a discount agreed for one role quietly becomes the rate for every role at that client.
How Vayora handles it
When an offer is accepted, Vayora creates the placement and sets the fee from the client's agreed terms: a fixed fee if the client has one, otherwise the client's fee percentage of the offer salary, otherwise your agency's standard perm fee from commercial terms. If none of those is recorded, the fee is left at zero for you to set rather than filled with a guess. Each placement can carry a fee structure, with presets for full fee on placement, a thirds split and the standard 100, 50 and 25 per cent rebate ladder, and a fee status that moves from pending invoice through invoiced and paid, or to rebate pending. Commission statements count a perm fee in the month of the start date once it is invoiced or paid.
FinanceThe longer answer: What is a rebate period in recruitment?