What it is
Pay rate markup is the percentage an agency adds on top of a contractor's pay rate to set the bill rate charged to the client. If a contractor is paid £40 an hour and the agency bills the client £56 an hour, the markup is 40%, calculated as the difference divided by the pay rate. Markup is not the same as margin: markup is measured against pay, margin is measured against the bill. A 40% markup on £40 works out to a margin of roughly 29% of the £56 bill rate, and that margin still has to absorb employer's National Insurance, holiday pay, pension contributions and the agency's overhead before anything counts as profit.
This is the commercial mechanic that makes a temp or contract desk different from a permanent desk. A perm placement earns a one-off fee, usually a percentage of first-year salary. A contract placement earns markup on every timesheet for as long as the contractor is on assignment, so the percentage compounds across weeks or months rather than landing once. Markup typically sits anywhere from the high teens to over 100%, depending on role scarcity, contract length, IR35 status and how competitive the account is, which is why the same desk can run very different markups across its book.
Markup is what you promise the client. Margin is what you actually keep after the deductions land.
Why it matters
Markup is where a temp desk's profitability actually lives, and it is set once per engagement but felt on every invoice after that. Quote it too low against a scarce skill and you underwrite a placement for months. Quote it too aggressively against a rate-sensitive client, especially one running the role through a VMS with visibility into market rates, and you lose the submission before a candidate is even considered. The right markup is a judgement call that weighs candidate scarcity, contract length, IR35 status and the client's existing rate card, made fresh for every requirement.
It also erodes quietly if nobody is watching. A markup agreed a year ago on a competitive account can be squeezed at renewal, undercut by a rate card review, or left stale while contractor pay rates in that skill have moved up in the market. None of that shows up as a single dramatic loss. It shows up as a desk that bills steadily but keeps less of it than it used to, which is a much harder problem to notice and fix.
How boilr handles it
boilr does not set your markups, that stays a commercial call for the desk, weighing the same factors any experienced consultant would. What it does is make sure the agreed markup and margin bands for an account are never buried in an old email or left in one consultant's head. Once they exist, they live in the Company Brain alongside that account's rate card and terms of business, so the number is consistent whoever on the desk picks up the requirement.
When a hiring signal fires on a contract or temp account, your AI sales employee already has the agreed markup context attached, so the task it drafts references a rate that reflects what the desk actually agreed, not a guess. Because that context sits in shared memory rather than a spreadsheet on one laptop, it survives a consultant leaving and gives the desk something concrete to check before a markup has drifted too far from what the role, and the market, actually justify.
