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Hourly rates: definition and calculation

Hourly rates determine what working with an external workforce costs. This entry explains what they consist of, how they are calculated and why staff leasing can pay off despite higher hourly rates.

Key facts
  • The fee per hour that the client pays the staffing provider for a temporary worker (SVS).
  • Contains wages, the employer's social security share, provisions, industry supplements, fixed costs and a profit margin.
  • Usually calculated with a multiplier of 1.8x to 2.2x on the hourly wage.
  • The amount and due date are agreed individually in the leasing agreement (AÜV).

Definition and classification

A Hourly rate (Stundenverrechnungssatz, SVS) is the fee a client company pays a Staffing provider per hour for leasing a temporary worker. Although the temporary workers work at the client, they receive their wage from the staffing provider, who is their formal employer – the hourly rate is the consideration out of which the provider covers that wage and all other costs.

In law, the equal treatment principle of the AÜG shapes the pay: after nine months of uninterrupted assignment at the latest, Equal Payapplies; where there is an industry supplement agreement, full alignment moves out to up to 15 months. The amount and due date of the hourly rate are agreed individually between provider and client in the leasing agreement (AÜV).

A practical example

A client pays an hourly rate of 2.0x the hourly wage for a skilled worker. The rate looks high – but because the client bears no holiday, sickness or recruitment costs and pays only for hours actually worked, the real cost per productive hour is often close to that of a comparable permanent job.

What does the hourly rate consist of?

The starting point is the cost the staffing provider incurs per hour of assignment. The hourly rate is therefore well above the employee's hourly wage, which is already included in it. The costs factored in are the wage or salary, the employer's share of social security, provisions for sickness and holiday, any Industry supplements and general overheads such as payroll accounting, reserves and fixed costs (rent, internet). On top come assignment-specific costs for recruitment, accommodation and transport to the place of work.

How are hourly rates calculated?

The hourly rate reflects what value is charged for an hour of staff leasing – including all costs and a profit margin. There are no fixed rates valid across the industry, since costs and margin are always calculated individually. In practice a multiplier of between 1.8x and 2.2x is usually applied to the employee's hourly wage. Offers only become comparable if qualification, scope of service and terms are defined identically – ideally through a Tender and a framework agreement.

Why is staff leasing economical despite higher rates?

The hourly rate looks high at first – and yet staff leasing often pays off. What makes sense is to compare the productive hourly wage: with permanent staff the client is the employer and also pays holiday and sick days; taking those absences into account, a worker works only around 77 % of the planned working days but is paid for 100%. With a temporary worker the staffing provider is the employer – the client pays only for the hours actually worked. On top come benefits that cannot be quantified: workers can be tried out on assignment before being taken on permanently, fluctuations in orders and staffing can be absorbed flexibly, the company's own recruiting effort falls away, and the provider carries the non-wage labor costs and the risk of absence.

Frequently asked questions

What is all included in the hourly rate?

Besides the hourly wage, the employer's share of social security, provisions for holiday and sickness, any industry supplements, payroll accounting and fixed costs, costs for recruitment, accommodation and transport, and a profit margin.

Are there fixed hourly rates per industry or occupation?

No. Costs and margin are calculated individually; there are no rates standardized across the industry. A multiplier of roughly 1.8x to 2.2x on the hourly wage serves as a guide.

Where is the level of the hourly rate set?

In the leasing agreement (AÜV) between the staffing provider and the client – that is where the amount and due date of the payment are agreed individually.

Why does a worker work only around 77% of the days?

Because holiday and average sick days come off the planned working days. With permanent staff the employer pays for those absences too; in staff leasing the client pays only for the hours worked.

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