Recruiter commission calculator

Banded and retrospective, on the same numbers

Most agency commission schemes pay a percentage of billings above a threshold, with the percentage rising in tiers. The difference that matters is how the tiers apply. In a banded scheme each rate applies only to the billings inside its band, the way income tax works. In a retrospective scheme, reaching a tier moves every pound above the threshold to the higher rate.

Take £42,000 of billings in a quarter against a £15,000 threshold, so £27,000 counts. With tiers of 10 per cent from zero, 15 per cent from £20,000 and 20 per cent from £40,000 over the threshold, the banded scheme pays 10 per cent on the first £20,000 and 15 per cent on the next £7,000: £3,050. The retrospective scheme pays 15 per cent on all £27,000: £4,050.

What counts as billings

Billings are usually perm fees plus contract margin, net of VAT. The details are where schemes differ and disputes start: whether a perm fee counts when it is invoiced or when it is paid, whether contract margin counts per timesheet or per invoice, and what happens to commission already paid if a placement falls inside its rebate period.

Splits are the other common argument. When two consultants share a placement, the scheme needs an agreed percentage for each, recorded at the time, not reconstructed at the end of the quarter.

Setting the threshold

A threshold is commonly set as a multiple of the consultant's base salary for the period, so that commission starts once the consultant has covered their cost to the business. The multiple varies by agency and by market, and a new starter is often given a reduced threshold for their first months.

Common questions

How much commission does a recruitment consultant earn?

It depends entirely on the scheme and on billings, which is why the scheme matters more than any headline rate. Rates of 10 to 20 per cent above a threshold are common on a 360 desk, with some schemes reaching higher at top tiers. Use the calculator with your own figures.

What happens to commission if a placement is rebated?

Most schemes claw back the commission on the refunded part of the fee, either from the next payment or by paying perm commission only once the rebate period has passed. The scheme should say which, in writing, before it happens.

Is commission paid on contract margin?

Usually, yes. On a contract desk the margin is the billing, so schemes commonly count gross margin as it is invoiced, week by week or month by month, rather than the charge rate. Because it arrives in instalments, contract commission accrues more steadily than perm fees, which is one reason agencies value a contract book.

Is retrospective commission better for consultants?

At the point a tier is crossed it pays more, sometimes much more, which is a strong incentive to push over a threshold before the period ends. It also creates cliff edges: a consultant just below a tier earns far less than one just above it. Banded schemes are smoother and easier to budget.