Recruitment commission plans pay consultants a share of what they bill — the placement fees they invoice on permanent roles, or the margin they generate on contractors — usually only once they clear a billing threshold that covers their cost of employment. Most UK agencies run one of four building blocks: a percentage of the perm fee, a banded threshold model on cumulative billings, a percentage of contractor gross margin, and a desk split when more than one person works the deal. Get the basis and the threshold right and the scheme runs the desk for you; get them wrong and you breed sandbagging, fee disputes, and consultants who quietly run a shadow spreadsheet of what they think they're owed. This guide maps the whole landscape and links to a deeper walkthrough of each model.
Recruitment is different from ordinary B2B sales in one important way: the "product" is a fee that can be partially refunded months later under a rebate clause, so commission can be earned, paid, taxed — and then clawed back. That single fact shapes how every well-run agency scheme is designed.
TL;DR
UK recruitment commission plans pay consultants a share of what they bill, above a cost-of-sale threshold that first recovers the cost of employing them. Perm desks pay a banded percentage of the placement fee (typically 15–25% of first-year salary); contract desks pay a percentage of gross margin that accrues weekly. Because almost every placement carries a rebate clause, a fee — and the commission on it — can be clawed back if a candidate leaves early, which makes recruitment commission harder to run than ordinary sales commission. The rates are simple arithmetic; the real work is reconciling billings, margin, splits and rebates accurately every month.
| Commission model | Paid on | When it's earned | Main risk to manage |
|---|---|---|---|
| Perm placement | % of the placement fee | Candidate's start date | Rebate clawback if they leave early |
| Contract / temp | % of gross margin | Weekly, as the contractor works | Early termination; client bad debt |
| Banded threshold | Billings above cost of sale | Once the threshold is cleared | Setting the threshold credibly |
| Desk split | Share of a co-worked deal | Per the split agreement | Attribution disputes |
What goes into recruitment commission plans?
A recruitment commission plan has to answer the same questions any sales commission scheme does — what you pay on, the rate, when it's earned, and when it's paid — but with a few staffing-specific twists baked in. Before you set a single percentage, write down five decisions:
- The basis. Perm fee, contract margin, or both (most desks are one or the other; some 360 consultants run both and need two bases).
- The threshold. How much must a consultant bill before they earn anything? This is usually pegged to their fully-loaded cost — salary plus on-costs — over a quarter or a year.
- The bands. What percentage applies in each billing band above the threshold, and do top performers accelerate?
- Earned vs payable. A perm fee might be earned on the candidate's start date but only payable once the client pays the invoice and the rebate period has passed.
- Splits. When a business-development consultant and a resourcer both touch a deal, who gets what?
Recruitment agencies in the UK operate under the Conduct of Employment Agencies and Employment Businesses Regulations 2003 and are overseen by the Employment Agency Standards Inspectorate. Those rules govern how you charge clients and treat workers; they don't dictate how you pay your own consultants, but they do shape the fee and rebate terms your commission plan has to track. Industry bodies like the Recruitment & Employment Confederation (REC) publish benchmarks worth checking your rates against.
How does perm placement commission work?
On a permanent desk, the billing is the placement fee — typically 15–25% of the candidate's first-year salary on a contingency basis, sometimes higher for retained or executive search. The consultant earns a share of the fees they bill.
Worked example: a consultant places a candidate on a £45,000 salary at a 20% fee. The agency invoices £9,000. If the consultant is on a 20% billing rate above their threshold, that single placement is worth £1,800 of commission to them.
Most agencies don't pay a flat percentage from pound one. They use a banded threshold model: the consultant covers their cost of sale first, then earns an accelerating share. The full mechanics — bands, cost-of-sale multiples, and how to set a threshold that motivates rather than demoralises — are covered in how UK agencies pay recruitment consultants on perm placements.
How does contract and temp commission work?
Contract and temp desks don't bill a one-off fee. They bill a charge rate for every hour or day the contractor works, and the agency's money is the gross margin: charge rate minus the contractor's pay rate minus on-costs (employer NIC, holiday pay, pension, the Apprenticeship Levy). Commission is paid as a percentage of that margin, accruing while the contractor is on site rather than landing in one lump.
This changes the shape of the plan entirely — margin is earned weekly or monthly, the off-payroll working (IR35) rules affect how contractors are engaged, and reconciliation has to keep pace with timesheets. See contract recruitment commission: paying consultants on margin for the full picture, including a worked margin calculation.
How do thresholds and rebates work?
Two staffing-specific mechanics cause most of the pain:
- Thresholds and bands. Set the cost-of-sale threshold too high and new consultants never reach it and leave; too low and you're paying accelerators for mediocre billing. Designing billing tiers that work walks through credible numbers and how accelerators apply once the threshold is cleared.
- Rebates and clawback. Almost every UK placement carries a rebate clause — leave within a rebate window (commonly up to 8–12 weeks) and the fee is refunded on a sliding scale. When that happens, commission already paid (and taxed) has to be recovered. Getting the clause and the clawback mechanics right is the difference between a clean recovery and a commission dispute. See recruitment commission clawback and rebate periods.
Rebates make recruitment commission uniquely messy. A fee can be earned, invoiced, paid to the consultant, run through PAYE — and then partly refunded if the candidate resigns in week six. Your plan must define, in writing, exactly how and when commission is clawed back, or you'll be arguing about it after the money has gone.
How is recruitment commission taxed?
There's no special tax treatment for recruiters. Commission — whether on a perm fee or contractor margin — is employment income, taxed through PAYE at the consultant's marginal rate with National Insurance on top, exactly like any other commission payment in the UK. The wrinkle is timing: when a rebate triggers a clawback in a later tax year, recovering the overpaid tax is far messier than an in-year adjustment. Keep clawbacks inside the same April–April window wherever the contract allows.
What should you automate?
The rates in a recruitment commission plan are simple arithmetic. The hard part is doing that arithmetic accurately across dozens of placements, contractor timesheets, split desks and rebates every single month — which is precisely where the true cost of the billings spreadsheet shows up as errors, reconciliation pain, and lost trust.
A platform like Commit calculates each consultant's commission from the billings, applies thresholds, bands and splits, handles rebate clawbacks, and exports the result straight into Xero for payroll — so finance isn't rebuilding the numbers by hand and consultants can see in real time what they've earned. That visibility is what keeps a desk motivated and disputes rare.
Frequently Asked Questions
What commission do recruitment consultants earn in the UK?
It varies by desk and seniority, but a common structure is a banded share of billings above a cost-of-sale threshold — often starting around 10% and accelerating into the 20–30% range for high billers. Perm consultants earn on placement fees (typically 15–25% of a candidate's first-year salary); contract consultants earn on the gross margin they generate. Some agencies pay a flat percentage of billings instead of a banded model, and basic salaries are deliberately modest because commission is the main driver of earnings.
How is recruitment commission different from normal sales commission?
The mechanics are similar, but recruitment adds two things ordinary sales rarely has: commission on contractor margin that accrues over time rather than a one-off deal, and rebate-driven clawback, where a fee — and the commission on it — can be refunded if a placed candidate leaves within the rebate period. Those two features mean a recruitment plan has to track earned-versus-payable and clawback far more carefully than a standard B2B scheme.
What is a billing threshold (cost of sale)?
It's the amount a consultant must bill before they earn commission, set to cover the cost of employing them — salary plus on-costs — usually expressed as a quarterly or annual figure. Below the threshold the agency is recovering its investment; above it, the consultant earns a banded share. A credible threshold is roughly a multiple of fully-loaded salary; set it too high and you lose people before they ramp.
Is recruitment commission taxed differently?
No. It's employment income subject to PAYE and National Insurance at the consultant's marginal rate, the same as any other commission. The only practical complication is clawback: if a rebate reverses a fee in a later tax year, recovering the overpaid tax is harder than an in-year correction, so well-drafted plans try to keep clawbacks within the same tax year.
Should new recruiters get a draw or guarantee?
Often, yes. New consultants take months to build a desk, so many agencies offer a guaranteed minimum or a draw against commission during the ramp period, recovered from future earnings. It bridges the gap before billings clear the threshold and stops you losing good people in their first two quarters.
Written by the Commit Team — we build UK sales and recruitment commission software at Commit, automating billing-based commission, thresholds, splits and rebate clawbacks with a clean export to Xero.
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