Staffing markup calculator vs. a spreadsheet
A spreadsheet can price a placement's real margin correctly. It has to carry a formula for every burden line, cap FUTA and SUTA at their wage base by hand, and get rebuilt correctly every time a rate or a comp code changes -- or it quietly reports markup / (1 + markup) instead, which is only right when the pay rate is the whole cost.
A spreadsheet is how most independent agencies
price a placement today, and there is nothing wrong with the
arithmetic itself: markup on the pay rate, burden as a percentage,
margin as a formula. The formula most desks actually use is
markup / (1 + markup) — 45% markup becomes a 31%
margin — and that identity is exactly right when the number
being marked up is the whole cost of the placement. It isn't. FICA,
federal and state unemployment tax, workers' compensation, PTO
accrual, benefits, onboarding and payroll admin all sit outside the
pay rate, and a one-line formula has no way to know that.
This calculator prices the loaded cost directly: it charges FUTA and SUTA against their wage base rather than as a flat percentage, so a short assignment carries the effect on its own; it applies the workers' comp class rate to the comp-eligible payroll, excluding the overtime premium where the state allows it; and it prices the cost of funding payroll for the days between paying workers weekly and collecting the invoice on the client's actual terms. It reports the real gross margin next to the margin the markup implies, and the break-even and target-margin markups directly — no formula to write or re-check.
| Question | Where to answer it |
|---|---|
| Can a spreadsheet price a placement's real gross margin? | Yes — if it caps FUTA and SUTA at the wage base, excludes the OT premium from comp payroll where allowed, and prices the cost of the client's payment terms, all correctly and every time a rate changes. |
| Is markup / (1 + markup) the real margin? | Only when the pay rate is the whole cost. In staffing it isn't — that is the gap this calculator prices. |
| What markup hits a 20% gross margin on this comp code and these terms? | This calculator's target-margin markup, computed instantly, plus a markup ladder for negotiating a discount. |
| Is anything typed in uploaded anywhere? | No. Neither a spreadsheet nor this calculator sends a placement's numbers anywhere; this calculator runs entirely in your browser. |
Nothing here says a spreadsheet formula is wrong to use — a correctly built one prices a placement exactly as well as this calculator does. The difference is what it costs to get there: this calculator applies the same wage-base-capped, comp-payroll- excluded, payment-term-priced method every time, with no formula to write, copy down a column, or re-check after a rate changes.
Common questions
Can a spreadsheet price a staffing placement's real margin?
It can, but the one-line formula most desks use — markup / (1 + markup) — only gives the real gross margin when the pay rate is the whole cost being marked up. In staffing it isn't: FICA, FUTA, SUTA, workers' comp, PTO, benefits, onboarding and payroll admin all sit outside the pay rate and inside the real cost. A spreadsheet can price that correctly too, but it has to carry a formula for each of those lines, including capping FUTA and SUTA at their wage bases rather than charging them as a flat percentage, and that formula has to be rebuilt correctly every time a rate, a comp code, or a state changes.
Why does the usual markup-to-margin formula overstate the real margin?
Because it assumes the pay rate is the only cost in the placement. Employer burden — FICA, unemployment tax, workers' comp, PTO accrual, benefits, screening and payroll admin — is real cost that sits outside the pay rate, so it is invisible to markup / (1 + markup) entirely. A 45% markup implies a 31% margin by that formula; once burden, the cost of funding payroll on the client's terms, and bad debt are counted, the placement can earn well under half of that, or lose money outright on a heavy workers' comp class code.
What does a hand-built spreadsheet have to get right that this calculator does automatically?
Three things that are each easy to get wrong once and never notice: charging FUTA and SUTA against their wage base with min(wages, wageBase) rather than as a flat percentage on every dollar, so a short assignment doesn't silently overcharge or undercharge the unemployment line; excluding the overtime premium from workers' comp payroll where the state allows it, rather than charging comp on the full 1.5x wage; and pricing the cost of funding payroll for the days between paying workers weekly and collecting the invoice on the client's actual terms, which a markup-only sheet usually omits altogether.
Is this page affiliated with any spreadsheet software?
No. This page names no specific spreadsheet product — Excel, Google Sheets, or otherwise — and compares against the practice of pricing a placement in a spreadsheet formula generally, not any one tool.
Is anything I enter uploaded anywhere?
No. The calculator this page links to runs entirely in your browser; nothing you enter is uploaded.
Open the staffing markup calculator to price your own placement, or read why markup and margin are not the same number in staffing.