Work out the fee and the margin before you quote

Almost every permanent placement carries a guarantee period, and almost every fee calculator ignores it. A twenty percent fee on an eighty thousand salary is sixteen thousand invoiced. If the candidate leaves inside a sliding-scale guarantee and you refund a proportion, the fee you actually kept is smaller, and if you booked the gross figure in a commission run you have already paid out against money that went back.

The calculator asks for your guarantee structure, sliding scale or full refund, the length of the window, and whether the term is a refund or a replacement. It then shows the gross fee, the maximum rebate exposure, and the net fee at each point in the window. Nothing here predicts whether a candidate will leave; it shows what the placement is worth if they do.

This is a number worth having in front of you before you agree a twelve-week full-refund guarantee to win a client. That term is not free, and a desk that books gross fees never sees what it cost.

On a contract desk there is no fee. There is a pay rate you owe the contractor, a charge rate you invoice the client, and everything between them that is not yours. On-costs are the part people forget: employer taxes and social contributions, holiday accrual, pension or superannuation, apprenticeship or training levies where they apply, insurance, and the cost of funding the gap between paying the contractor weekly and being paid by the client in sixty days.

The calculator takes pay rate, charge rate and your on-cost percentage or itemised on-costs, and returns gross margin per hour, per day and per week, plus margin as a percentage of charge rate. It shows the on-cost figure as its own line rather than folding it into a single number, because that line is where a contract desk quietly loses money when a client negotiates the charge rate down and the on-costs do not move.

Perm desks think in fees, and it is a reasonable way to think, because a fee is a discrete event. Contract desks that think in fees get into trouble, because the equivalent event on a contract book is small and the value is in its repetition. A contractor on a modest weekly margin who runs for fifty weeks is worth more than a single permanent placement, and takes far less work after the first week.

So the number to manage is margin per contractor per week, multiplied by the number of contractors out, multiplied by the weeks they run. The calculator returns that per placement and lets you total a set of contractors into a weekly book value. Once you are looking at that figure, the decisions change shape: extending a runner is worth more than most new business, and a rate cut on a long assignment costs more than it looks.

It also makes the funding question visible. Contractors are paid before clients pay you, so a growing contract book consumes cash even while it is profitable. Weekly margin against weekly payroll outlay is the comparison that tells you whether growth is affordable this month.

The calculator will process the rates and percentages you enter to compute the result and will not retain them. Nothing is written to a Surhires account, no account is needed to run it, and the figures are not used for anything other than producing the numbers on screen.

Commercial terms are sensitive in a different way from candidate data, and the sensitivity is yours rather than a third party's. Your charge rates, your on-cost assumptions and your rebate terms are competitive information about your business. If you would not email them to a supplier, think about whether you want them in any free web tool, ours included. If you paste a client name or a contractor name alongside the rates, you have added somebody else's personal or commercial data to the entry, and that decision sits with you as controller.

It will not give you a tax calculation. On-cost percentages vary by country, by employment structure, by whether the contractor is PAYE, umbrella, limited company or a US W-2 or 1099 arrangement, and by thresholds that change every year. The tool takes the on-cost figure you supply. It does not assert what yours should be, and you should get that figure from your accountant rather than from a marketing website.

It will not tell you what percentage to charge, because that is a market and relationship question rather than an arithmetic one. It will not model IR35, co-employment or worker classification risk. It will not produce an invoice; that is the placement invoicing workflow inside the product, which carries the placement record and the guarantee window with it.

A calculator on a marketing page is a scratchpad. Inside Surhires the same figures live on the placement record: the fee base you agreed, the percentage, the guarantee window and its expiry date, the rate card for a contract assignment and the on-cost profile for that client.

That means the pipeline view can show revenue booked against revenue invoiced, and can flag placements still sitting inside a guarantee window where a drop-out would trigger a rebate. It also means a commission run can be calculated against net rather than gross, which is the difference between paying a recruiter twice on the same placement and not.