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Placement fee and guarantee calculator
Price a direct-hire placement the way your agreement actually reads: what counts in the fee base, minimums and discounts, your split and commission, and exactly what you owe back if the hire leaves inside the guarantee. Then switch to retained search installments with a true-up, or work out a temp-to-hire conversion fee and whether converting now beats billing longer.
Result
A fee is only worth something once there is a job order.
Use the tool as much as you like. When you want the job orders found and worked across your whole market, that’s what Wavaron runs.
- Direct hire, retained and temp-to-hire
- Guarantee exposure before you sign
- Copy the numbers into your invoice or CRM
- We scan the employers in your niche and city, including ones our free tools can’t read
- 3 companies worth calling this week, who signs, and why now
- On a 30-minute strategy call. You keep the list either way
- Your whole market watched every week
- The signer found and verified for every opportunity
- Your ATS candidates matched to each role
- Approved outreach from domains in your firm’s name, replies routed to your recruiters
- First play live in 30 days, or your first month is free
How it calculates
Every starting number is an example taken from a published agreement or a placeholder. None of them is an industry benchmark. Your signed agreement sets the real terms.
What counts in the fee base
This is where most fee disputes start. “First-year salary” can mean base pay only, base plus a guaranteed bonus, or total first-year cash including a sign-on bonus. Retained agreements usually say “first-year cash compensation” and spell out what that includes. One university search contract we reviewed counts base salary, a cash signing bonus, performance bonus and car or housing allowance, and excludes non-cash items. Write the definition into your agreement and use the same one on the invoice.
Guarantee policies, side by side
| Policy | If the hire leaves inside the period | Your exposure |
|---|---|---|
| Pro-rata refund | You refund the share of the period they didn’t work | Highest early, falls to zero by the last day |
| Stepped refund | A fixed share back by step, such as all of it in the first 30 days and half up to day 60 | Predictable; easy to explain to the client |
| Full refund | All of the fee back, any day inside the period | The whole fee until the period ends |
| Replacement only | You run the search again at no new fee; no money goes back | Recruiter time, not cash |
Many agreements mix these: a replacement first, and a refund only if no replacement is found in a set time. A published 2019 Kelly Services agreement with a California public agency offers either a replacement or a refund of the unworked share of a 30-day guarantee, at Kelly’s choice.
Conditions to write into every guarantee
- Paid on time. The Kelly agreement applies its guarantee only if the fee is paid in full within 21 days of the start date. Courts have upheld guarantees voided by late payment.
- Prompt written notice that the hire has left, within a set number of days.
- Exclusions for reasons outside the hire’s control: layoffs, lack of work, restructuring, a changed role or a moved location.
- A replacement window, and whether the replacement carries its own guarantee.
- Candidate ownership: how long a fee is due if the client hires someone you introduced. The Kelly agreement reserves candidates for 12 months.
Retained search billing
Retained fees are paid whether or not the client hires your candidate, usually in three installments. In the university contracts we reviewed, firms such as Korn Ferry and Witt/Kieffer charged one-third of first-year cash compensation with a minimum fee, billed in thirds or 33/33/34, plus expenses. Some added an indirect expense charge of 9% to 15% of the fee. Because the fee starts on an estimate, the final invoice is adjusted to the accepted offer. Replacement searches for 12 to 24 months, for expenses only, were common.
Temp-to-hire conversion fees
When a client hires your temporary worker directly, the agreement usually charges a conversion fee that shrinks the longer the worker has been on assignment, because you have already earned margin on those hours. That 2019 Kelly agreement charges 25% of annual salary up to 260 hours, 20% to 520, 15% to 780, 10% to 1,040, and 2.5% after that. Some public contracts drop to zero after a set number of hours instead.
The calculator also compares converting now with billing for a few more weeks and converting later. If the client is going to hire the worker either way, that tells you which date earns your firm more.
What it leaves out
- Fees charged to job seekers. Many states license employment agencies and limit what workers can be charged; this tool is for employer-paid fees only.
- Late-payment interest, collection costs and taxes.
- Off-limits and exclusivity terms, which change what a search is worth but not the fee math.
Questions recruiters ask
How is a placement fee calculated?
Multiply the fee base your agreement defines (base salary, or first-year cash) by the fee percentage, then apply any minimum fee and discount. A 20% fee on a $95,000 base salary is $19,000.
How do I calculate a pro-rata guarantee refund?
Fee × (guarantee days − days worked) ÷ guarantee days. On a $20,000 fee with a 90-day guarantee, a hire who leaves on day 30 means a $13,333 refund. The chart shows the refund for every day of the period.
Should I offer a refund or a replacement?
A replacement keeps the cash and costs recruiter time; a refund is simpler for the client and costs you money. Many firms offer a replacement first and a refund only if they can’t fill the seat again in a set window.
How do retained search installments work?
The fee is set on estimated first-year cash compensation and billed in parts, often a third at signing, a third at a milestone such as the shortlist, and the rest at placement. The last invoice is adjusted to the accepted offer.
What is a temp-to-hire conversion fee?
The fee a client pays to hire your temporary worker directly. It is usually a share of the worker’s annual salary that steps down as hours on assignment build up.
Is my data saved or sent anywhere?
No. Everything runs in your browser.
Sources
- Kelly Services, Exhibit A to its customer services agreement with the Kensington Police Protection and Community Services District (California), effective June 28, 2019, published on the district’s website: conversion schedule, direct-hire fee, 30-day guarantee conditions and 12-month candidate reservation. Read October 25, 2026.
- University of Wisconsin System, executive search contract information: retained fees, minimums, installments, expense charges, true-up and replacement terms from ten search firms. Read October 25, 2026.
- Canadian Lawyer: a case where a replacement guarantee was lost because the invoice wasn’t paid within 30 days.