Recruiter commission

Most UK agency schemes share a shape. A consultant carries a threshold, often a multiple of their base salary for the quarter, and earns a percentage of gross profit above it, sometimes rising in tiers. Some schemes pay a lower percentage from the first pound instead. The scheme document also has to say when gross profit counts: when the placement is made, when the candidate starts, when the client is invoiced, or when the client pays.

A worked example on one common shape. A consultant on a £30,000 base has a quarterly threshold of three times quarterly base, £22,500, and earns 20 per cent above it. Billing £40,000 of gross profit in the quarter earns 20 per cent of £17,500, which is £3,500. If a £6,000 perm fee from that quarter is later half rebated, the scheme should say whether the £3,000 comes off the next quarter's gross profit, which for a consultant above threshold costs them £600.

Splits need the same clarity. When one consultant owns the client and another found the candidate, agencies often split the credit, commonly half each, though the ratio is a matter of policy. On contract placements the split usually lasts as long as the contract, so an extension keeps paying both. Contract credit also compounds: a consultant with ten contractors out at £110 a day of margin credits £5,500 of gross profit a week, around £23,800 in an average month, before making a single new placement. Splits agreed verbally are the ones that turn into disputes a year later.

The common failures: commission paid on perm fees before the rebate period ends, contract commission calculated on the bill rather than the margin, credit notes that never reach the commission sheet, splits recorded nowhere except the memory of the two consultants involved, and statements the consultant rebuilds themselves because the ones from finance do not match the invoices.

The longer answer: What is a rebate period in recruitment?