Free calculator for staffing agency owners
How much can a staffing agency owner pay themselves?
A staffing owner works on thin margins with a huge payroll. What you can take depends on gross margin after taxes and comp, and on how much cash sits with clients.
The starting numbers are an example for a staffing agency. Replace them with yours.
Three rules for paying yourself from a staffing agency
- Base steady pay on average profit after factoring fees.
- Take extra draws only when days to collect are stable.
- Personal taxes come out of what you take. Ask your accountant how much to set aside.
What changes the answer for a staffing agency
A big new client can make revenue jump while cash falls. You pay their temps weeks before they pay you. Check days to collect before any draw.
The worked example
In the example, the business keeps $157,000. That covers $120,000 for two payrolls, $12,000 of monthly bills and $25,000 due soon. Steady pay comes to $14,400 a month. Anything above $157,000 in the bank is spare.
A common question
Should a staffing agency use factoring?
Factoring turns invoices into cash in days, for a fee. It can make sense for fast growth. Compare the fee with your margin per hour before you sign.
Know what is safe to take, every week
One Page CFO shows the cash above your safe line every Monday, from your QuickBooks, checked by a CFO.