agency fee
Definition
An agency fee is a charge you pay to a third party, like a staffing firm or talent agency, in exchange for them finding and connecting you with workers, tenants, or clients on your behalf. Think of it as the middleman's cut for doing the legwork of sourcing people you need for your business. The fee is typically a percentage of the worker's salary or the total contract value.
Example
If you hire a staffing agency to find you a full-time office manager at $50,000 per year and the agency charges a 20% agency fee, you would owe the agency $10,000 on top of the employee's salary.
Watch Out
Always get the agency fee structure in writing before you start working with any staffing or placement firm, because surprise fees can seriously throw off your hiring budget.
See which terms appear in your contract?
This definition is for informational purposes only and does not constitute legal advice. Please consult with a licensed attorney for legal guidance.