SIA defines gross margin as the difference between the bill rate for the temporary services and the direct costs of employment (pay rate plus burden and/or mandatory benefits).
In the United States, burden includes workers’ compensation, unemployment insurance, employer’s share of FICA and state or local taxes for each temporary employee on assignment.
In Europe, mandatory benefits vary per market but will generally include employment tax and social insurances.
Staffing company gross margins vary per country and per staffing category depending on the perceived value-add of the service provided. Among the 16 companies tracked in SIA’s report, gross margin ranged from 14.8% to 41.6% in 2018.