August 19, 2026
A 20–25% agency fee on a $150,000 salary is $30,000 or more. Here’s how the numbers compare across a year of hiring.
Most agencies charge a percentage of first-year salary, usually 20–25%. It sounds reasonable until you multiply it out across your hiring plan.
The maths on one hire
| Salary | Agency at 20–25% | Flat fee |
|---|---|---|
| $120,000 | $24,000–$30,000 | $5,000 |
| $150,000 | $30,000–$37,500 | $5,000 |
| $200,000 | $40,000–$50,000 | $5,000 |
Across a hiring plan
A Series A company hiring eight people at an average of $150,000 would pay $240,000–$300,000 in percentage fees. With a flat fee it’s $40,000. The difference is months of runway, or two more engineers.
Why percentages persist
Percentage fees made sense when agencies carried large teams and long searches. They also create an incentive nobody talks about: the higher the salary, the bigger the fee. A flat fee removes that tension. The only thing that matters is whether the person is right for you.
What to ask any recruiter
- What do I pay, and when?
- What happens if the hire leaves in the first 90 days?
- Do you charge anything upfront or as a retainer?
If the answers aren’t simple, the pricing probably isn’t either.
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