Hiring through a staffing agency can be a game-changer for Canadian businesses—but many employers find themselves asking: “What exactly is included in the markup we’re paying?” If you’ve ever wondered what goes into the cost structure of working with a temp agency, this article breaks it down.
At Career1, we believe in complete transparency when it comes to pricing, so let’s take a closer look at what you’re really paying for when you partner with a staffing agency in Canada.
What Is a Staffing Agency Markup?
A markup is the percentage added to a worker’s hourly wage to cover the agency’s operational costs, compliance responsibilities, and profit margin. For example, if a forklift operator earns $20/hour, and the agency charges a 35% markup, your bill rate is $27/hour.
But what does that extra $7 include? It’s more than just overhead—it’s about risk management, recruitment support, payroll handling, and more.
1. Recruiting, Screening & Onboarding
Staffing firms invest heavily in sourcing, screening, and onboarding quality candidates. From posting jobs, reviewing resumes, and conducting interviews, to running background checks or drug tests—these steps cost time and money.
At Career1, we don’t just send resumes—we pre-screen, test, and verify candidates for roles in manufacturing, logistics, food production, and more across Canada.
2. Payroll Administration & Compliance
One of the biggest burdens removed from your plate is payroll administration. Agencies handle:
- Weekly payroll
- Tax deductions (CPP, EI, income tax)
- ROEs and T4s
- WSIB/WCB claims
- Vacation pay and statutory holiday pay
This is a huge compliance responsibility, especially in provinces like Ontario, Alberta, or British Columbia. By working with a fully licensed agency like Career1, you’re staying compliant with provincial labour laws and avoiding penalties.
3. Liability & Insurance Coverage
When you hire temp workers through an agency, you’re also outsourcing risk and liability. This includes:
- General liability insurance
- WSIB (in Ontario) or WCB (in Western provinces)
- Workplace injury claims
- Employment standards complaints
At Career1, our clients can rest easy knowing they are covered and protected. This is one of the most undervalued components of the markup—until something goes wrong.
4. Replacement Guarantees & Backup Support
Reputable agencies offer guarantees. If a temp doesn’t show up, underperforms, or quits early, a good agency like Career1 will replace the worker at no extra cost.
This ensures business continuity, especially for mission-critical operations like warehouse fulfillment, production lines, and distribution hubs.
5. Access to Industry Insights & Workforce Trends
You’re not just paying for a body—you’re paying for a partner with local labour market expertise. At Career1, we provide clients with real-time wage trends, shift optimization advice, and even competitor intelligence on staffing practices in your area.
Our insight helps you stay competitive in attracting talent—without overpaying.
What’s a Fair Markup in Canada?
Typical markups in Canada range from 25% to 50%, depending on:
- Industry (e.g., food processing vs. skilled trades)
- Volume of hires
- Risk profile of the work
- Length of assignment (temp vs. temp-to-perm)
At Career1, we customize our markups based on your workforce needs. We also offer rebate options and flexible payment terms for long-term partnerships.
The Bottom Line: You Get What You Pay For
While some agencies offer bargain-basement markups, they often cut corners—resulting in poor placements, compliance issues, and lack of support. Partnering with a trusted Canadian staffing agency like Career1 ensures you receive quality, consistency, and peace of mind.
If you’re curious to review your current rates or want to compare with what we can offer, feel free to contact us today for a no-obligation proposal.
