Pricing Model
How much of staff augmentation rates go to developer salary vs agency fees?
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Understanding the fee breakdown helps evaluate if you're getting fair value. Here's how staff augmentation rates typically split:
Typical breakdown:
| Component | % of Rate | Example ($8,000/mo) |
|---|---|---|
| Developer salary | 55-65% | $4,400-5,200 |
| Benefits & equipment | 10-15% | $800-1,200 |
| Agency margin | 20-30% | $1,600-2,400 |
What the agency margin covers:
•Recruiting and vetting costs
•Sales and account management
•Payroll administration
•Talent management and retention
•Replacement costs when developers leave
•Business overhead and profit
Why margin matters for quality:
Low-margin providers (15-20%):
•Less investment in vetting
•Minimal talent management
•Higher turnover (they can't afford retention)
•Often pay developers below market
Fair-margin providers (20-30%):
•Thorough vetting process
•Ongoing talent management
•Competitive developer pay = better retention
•Sustainable business model
Red flags:
•Very low rates often mean developers are underpaid → high turnover
•Very high rates (40%+ margin) may indicate inefficiency
•Lack of transparency about rate breakdown
Questions to ask:
•What percentage goes to the developer?
•What benefits do developers receive?
•What's your annual developer turnover rate?
BEON.tech passes approximately 75-85% of client rates to developers (salary + benefits), keeping 15-25% for services and margin.
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