Last updated: November 1, 2026
By Kris Drouet, Engineering Executive, in partnership with KORE1
Before signing with a contract staffing firm, ask in writing for the pay rate, the burden components and percentage, what the bill rate covers, the conversion terms, and the replacement policy. For example, $100 an hour in pay plus a 24% burden is $124 loaded, and a $150 to $160 bill rate covers that plus recruiting, account management, and margin (KORE1 worked example).
A firm once quoted me a percentage. I asked what it sat on. The account rep said he’d check, and two days later he came back with a lower percentage. Still no base.
I laughed. Then I called someone else.
I have spent 25 years reviewing systems, and the habit doesn’t switch off when the thing under review is a vendor. If an engineer told me a service’s latency was “competitive,” I’d ask for the p50, the p95, and the load it was measured under. Show me the data. A staffing quote gets the same treatment, and the questions to ask a staffing agency about bill rates are neither hard nor rude. There are six of them. I send them in writing before anyone signs anything, because how a firm answers tells me nearly as much as what it says.
You should know where I sit. I’m the buyer in this piece, and I write in partnership with KORE1, which sells contract staffing services. So run KORE1 through the same six. Its answers are in a box further down, in its own voice, and I’d treat them like anybody else’s until you’ve checked.
Why I Ask for the Data Before I Sign
A contract team is a buy decision. I’d never approve a platform purchase without looking under the hood, and the same reasoning from how I frame build vs buy decisions applies when the thing you’re buying is an engineer by the hour. Thirteen weeks of one software engineer at KORE1’s median bill rate comes to $54,600. Would you sign a $54,600 purchase order with a blank where the unit cost should be? I wouldn’t.
Engineering leaders tend to hand this conversation to procurement and then act surprised by the invoice, which I understand, because nobody ever got promoted for reading a staffing agreement, but procurement doesn’t know which seat is load-bearing and you do.
Devin Hornick, a partner at KORE1, has the cleanest vendor test I’ve heard. Work with “a firm who’s willing to show you how they make their money and not hide anything.” One sentence. It screens out more firms than a procurement scorecard does, and it takes less time to run.
Here is what goes in my email, nearly word for word.
- What will the contractor be paid per hour, and will you show me that number?
- What is in your burden, line by line, and what percentage does it come to?
- If you quote a markup, does it sit on pay or on loaded cost?
- What does the bill rate cover, and what gets invoiced on top of it?
- At what hour can I hire this person with no fee, and what does it cost before then?
- What happens if the contractor leaves in week five?
Email, not a phone call. People remember phone calls the way they’d like them to have gone, and that includes me. Keep the thread. Forward it to finance.
What Is the Pay Rate, and Will You Show It?
The pay rate is what the contractor earns per hour. The bill rate is what you pay the firm per hour for that same person. Everything you are trying to understand about a staffing quote, from payroll taxes to the firm’s profit, lives in the distance between those two numbers.
Why do I care, if the invoice is the invoice? Because I’m buying someone’s attention. A contractor paid well under market is already interviewing, on my time, and I find out about it when they give notice in the middle of a cutover, usually on a Thursday, usually after they’ve become the only person who remembers why the reconciliation job runs twice. Expensive lesson. So a low pay rate inside a high bill rate is the worst version of this deal, and you can’t spot it from the bill rate alone. If someone has already become the only person who knows a system, a contractor dependency check on critical systems will show you which one.
Some firms will decline. Ask anyway. I don’t assume the worst when they refuse, since a contractor’s pay is also that contractor’s business. Fair enough. A range works for me, or the loaded cost, because either one lets me check whether the person I’m about to depend on for six months is being paid enough to stay for six months, and that was the point of asking in the first place. What doesn’t work is no number and no reason.
What Is in Your Burden, and What Percentage?
Burden is what an employer owes on top of wages, and in every KORE1 example it’s modeled at 24%. The lines are boring and mostly public. IRS Publication 15 puts the 2026 employer share of Social Security at 6.2% up to a $184,500 wage base, and Medicare at 1.45% with no cap. Federal unemployment under IRS Topic 759 is 6.0% on the first $7,000 of wages, with a credit of up to 5.4%. In California, the Employment Development Department assigns new employers a 3.4% unemployment insurance rate plus a 0.1% training tax, both on the first $7,000. Then come workers’ compensation and liability insurance, and California paid sick leave of at least 40 hours or five days a year. None of it is secret. A firm that can’t list these either doesn’t know its own costs or would rather you didn’t.
Workers’ compensation moves with the job class, so a software title in an office and a field technician on a ladder shouldn’t share a number, and liability coverage moves with what the contract asks the firm to carry, which is one more reason to ask what the 24% assumes before you start arguing about it.
Now look at those caps like an engineer. At $100 an hour, the $7,000 taxes stop applying around hour 70, not even two weeks in. Social Security stops at hour 1,845. Both reset on January 1. So a flat 24% across a long assignment, across pay rates, and across states is a model and not a measurement.
That’s fine. I like models. I just want to hear someone say it’s one. Nobody needs to redo payroll math on a vendor call, and I’m not asking anyone to, but a rep who can tell you the percentage assumes a California software title on a full-year assignment has clearly looked at the thing they’re selling, and one who can’t probably hasn’t. The line-by-line contractor burden rate breakdown is a decent reference to hold a firm’s answer against.
Is Your Quoted Markup on Pay or on Loaded Cost?
Burden often gets left out of a quoted markup. That’s the whole trap, and it’s the same problem as the rep at the top of this piece. A percentage without a base tells you nothing.
Take $100 of pay and $24 of burden. One point of markup on pay is worth $1.00 an hour. One point on loaded cost is worth $1.24. Twenty-four cents sounds like a rounding error until you multiply it by a 520-hour quarter and get $124.80, per point, and nobody quotes you one point. Do the multiplication.
I won’t tell you what a normal percentage is, partly because I don’t think that number means much until the base is pinned down and partly because the firms that lead with it are usually hoping you’ll stop asking at that point. Ask for the all-in hourly bill rate instead, then ask what it’s built from. Robert Ardell, a KORE1 co-founder, has the arithmetic and a worksheet for comparing staffing quotes line by line if you’re holding three of them right now.
The Worked Example
This one is Devin’s, built on California numbers, and I like it because the math fits on a napkin.
| Line | Per hour | What it pays for |
|---|---|---|
| Pay rate | $100 | The contractor’s wages |
| Burden at 24% | $24 | Employer payroll taxes, required insurance, California paid sick leave |
| Loaded cost | $124 | What the seat costs before the firm has done anything else |
| Bill rate | $150 to $160 | Loaded cost plus recruiting, account management, and margin |
| 13 weeks at 40 hours | $78,000 to $83,200 | Your purchase order |
Two things get skipped when people retell this. The $100 is a round number picked to keep the math readable, and it’s well above what a typical mid-level seat pays. And the $26 to $36 between loaded cost and bill rate is not all profit, since somebody had to find this person, screen them, and answer the phone in week nine when the timesheet is wrong. I’d be nervous about a firm with nothing in that gap. What pays for the second contractor when the first one quits? That gap does.
If you’d like to see this built on a real seat, ask KORE1 these questions on a bill rate quote. It asks for the role, level, metro, start date, and length, which is everything a straight answer depends on.
What Are the Conversion Terms?
Ask before you need the answer. By the time you want to hire a contractor, they’ve become the person who understands your settlement service, and you are negotiating with no bargaining position at all. Three things belong in writing: the hour at which the fee goes to zero, what the fee is at hour 400, and whether a paused engagement stops the clock. Firms differ on all three. Get it in the contract.
People treat this clause as boilerplate until the day a manager walks into your office and says the contractor on the payments team is the best engineer you have, at which point the boilerplate turns out to be the most expensive paragraph in the agreement.
KORE1’s version is simple enough to repeat. No fee after 1,040 hours, which is six months at full time. And it’s a clause people actually use, since 37.5% of KORE1’s contract-to-hire placements convert (n=552). The contract-to-hire conversion rates piece breaks that down further.
I set the conversion date at kickoff, as part of how I run contract engineers, whether or not I expect to use it. Nobody’s feelings get hurt by a date on a calendar. Plenty get hurt by a surprise fee in month five. Cheap insurance.
What Happens If a Contractor Leaves?
This is the question where the most honest answer sounds the worst. Devin’s is the one I respect: “As far as guarantees, there aren’t any. Not on contract.” Blunt. Good. KORE1 doesn’t offer a replacement guarantee on contract work, and it tells you so. What it commits to is that contractors show up on time and get paid on Fridays.
Direct hire is a different product with a different deal, which at KORE1 means a fee of 20% of base salary and a 60-day guarantee on direct hire placements. Don’t let anyone blur the two for you.
So if a firm promises a contract guarantee, read what the remedy actually is. A credit? Another resume? Read it twice. In my experience, a replacement guarantee on hourly work usually means they’ll restart the search, which they’d do anyway because that’s how they get paid. Better questions are how fast the next candidate shows up, and who owns the handoff when somebody walks out with the context in their head. Part of that one is yours. Contractors leave bad managers too, and no clause covers that.
What Bill Rates Look Like by Role
There is a seventh question, and I save it for the end. How many placements sit behind that number? A rate with no sample size behind it is an opinion. Not useless. Just not data. Here’s what the same question looks like answered.
| Seat | Source | Bill rate, p25 to p75 | Median | 3 months at 40 hours |
|---|---|---|---|---|
| Help desk Level 2, United States | Modeled | $44 to $56 | $49 | $25,400 |
| Help desk Level 2, Dallas-Fort Worth | Modeled | $43 to $54 | $48 | $25,000 |
| Software engineer, all levels | KORE1 observed, n=16, primarily Southern California | $91 to $120 | $105 | $54,600 |
| ERP, NetSuite, or Salesforce consultant, all levels | KORE1 observed, n=15, multi-state | $73 to $123 | $91 | $47,200 |
Source: KORE1 Contract Rate Index 2026-Q4, effective October 16, 2026. Observed cells come from KORE1 W2 contract placements started 2023 to 2026, with at least five per cell. Modeled cells use BLS OEWS May 2025 wages plus a 24% burden, times the bill-to-cost range KORE1 observes. Details are in the Contract Rate Index methodology.
Read the labels first. A modeled Level 2 help desk contractor in Dallas-Fort Worth bills $43 to $54 an hour, median $48, and the word “modeled” is doing honest work in that sentence, because it tells you nobody is claiming a pile of Plano placements behind it. I want that label from every firm. And look at the ERP row, where the middle half of placements spans $50 an hour. That spread is telling you the title is too broad to price, so when a firm gives you one flat number for “ERP consultant,” ask which ERP consultant. NetSuite or Salesforce? Functional or technical? It moves the number.
For more seats, the 2026 contract staffing rate card and the guide to tech contractor hourly rates go role by role, the help desk bill rate guide covers that seat by level, and IT staff augmentation cost covers the budget view.
How I Score the Answers
I don’t need a firm to be perfect. Nobody is. Here’s what I listen for.
| I ask about | An answer I trust | An answer that worries me |
|---|---|---|
| Pay rate | A number or a range, or a stated reason for neither | “We don’t really look at it that way” |
| Burden | A percentage, the lines inside it, the state it assumes | “All the usual costs” |
| Markup base | One sentence, plus an all-in hourly rate | A lower percentage, two days later |
| Bill rate coverage | Overtime, holidays, and screening named one by one | “It’s all in there,” with nothing written down |
| Conversion | An hour count and a fee schedule in the contract | “We’ll work something out” |
| Replacement | A plain statement of what is and isn’t promised | A guarantee with no remedy attached |
How KORE1 Answers These Questions
This section is written by KORE1, not Kris.
We place contract engineers as W2 employees of KORE1. Our recruiters specialize by discipline, and every candidate is technically screened and reference-checked against the project before you see a resume. Median time from offer to start on our contract placements is 3 days (n=1,997).
The burden in our examples is 24%. It covers employer payroll taxes, workers’ compensation, general and professional liability insurance, and state-required sick leave, and we also pay for our contractors’ dental and vision coverage. Contractors get paid weekly, on Fridays. They can convert to your payroll at no fee after 1,040 hours. We do not offer a replacement guarantee on contract, and we’d rather say that here than in a footnote.
We publish bill rates by role, level, and metro, with sample sizes and modeled cells labeled. Send us the six questions with your role, level, metro, and start date, and we’ll answer them against a real seat.
Things Buyers Ask Before the Contract Goes Out
Do agencies include markup in hourly contractor rates?
The bill rate you pay already contains the firm’s markup, along with the contractor’s pay and the employer burden.
The pay rate doesn’t. That’s why a contractor’s number and your number can differ by a lot without anybody lying. Ask for both, or for the loaded cost. It costs nothing.
How do staffing agencies hide markup from clients and developers?
Mostly by leaving things out, such as a percentage quoted with no base, a burden billed outside the quoted markup, or a client who sees only the bill rate while the developer sees only the pay rate.
Plenty of this is habit and not malice. The two sides of a staffing deal rarely compare notes, so nobody has to say anything false for the gap to stay invisible. Asking in writing is what closes it. So ask. I’d also ask the developer, once they’re on the team, whether the firm pays on time, because the contractor is the only person in the arrangement who sees that side of the firm every single week, and that one answer will teach you more than the sales deck did.
Level 2 help desk in Plano or Dallas: what should I expect to pay?
$43 to $54 an hour is the typical bill rate for a W2 Level 2 help desk technician in Dallas-Fort Worth, median $48, as of October 16, 2026.
A three-month, 40-hour-a-week contract at the median runs about $25,000, and six months about $50,100. That’s modeled from BLS OEWS May 2025 wages, a 24% employer burden, and KORE1’s observed bill bands (KORE1 Contract Rate Index 2026-Q4). The metro cut includes Plano, Irving, and Frisco, and the Dallas-Fort Worth IT contractor rates page has the other seats.
Should I walk away if a firm won’t show me the pay rate?
Not automatically, because a contractor’s pay is private to some degree and a range or a loaded cost can tell you what you need.
Ask for one of those. Walk away when the refusal comes with no reason and no substitute. Then you’ve learned how the next invoice dispute will go.
What’s the national number for that same help desk seat?
About a dollar higher than Dallas-Fort Worth at the median, with a Level 2 help desk technician on a W2 contract typically billing $44 to $56 an hour nationally, median $49, as of October 16, 2026.
Three months at the median is about $25,400, and six months about $50,700 (KORE1 Contract Rate Index 2026-Q4, modeled). A national number is a starting point. Only that. I wouldn’t budget a San Francisco seat off it.
Send the Email
Six questions, then the seventh. It takes ten minutes to send, and the firm’s reply will tell you whether you want it near your budget.
Some firms will answer all seven inside an afternoon, a few will take a week and send you a deck, and at least one will call your boss, which is also an answer, though not the one it was hoping to give. Keep that one on file.
You can also rough out the seat first with the contract staffing cost calculator, so you know what number you’re holding the answers against.
If a firm gave you an answer I haven’t heard yet, I want to hear it. Connect with me on LinkedIn. And if you’ve got a seat to fill, you can talk to a KORE1 recruiter and start with question one.
