Service Models
How much margin do staff augmentation companies charge?
Hide answer
Staff augmentation companies typically charge 20-35% margin on top of the developer's base cost. Here's how the math works:
Typical cost breakdown:
| Component | Amount |
|---|---|
| Developer salary | $4,500-5,500/mo |
| Benefits & equipment | $500-800/mo |
| Provider margin | $1,200-2,000/mo |
| Client rate | $6,500-8,500/mo |
What the margin covers:
•Recruiting and vetting costs
•HR and payroll administration
•Equipment procurement
•Retention and talent management programs
•Replacement costs if someone leaves
Margin vs value comparison:
•Low-margin providers (15-20%): Basic placement, minimal ongoing support
•Mid-margin providers (20-30%): Full talent management, replacement guarantees
•High-margin providers (30%+): Premium vetting, specialized skills, faster placement
No hidden fees in good models:
•No upfront recruitment fees
•No replacement fees
•One predictable monthly rate
The margin is how providers fund ongoing services—companies paying bottom-dollar rates often experience higher turnover and weaker support.
staff augmentation feesstaffing company marginsdeveloper markupoffshore staffing costs breakdown
Was this helpful?
Use the up and down arrow keys to navigate between questions. Use Home to go to the first question and End to go to the last.