How does a recruiter commission structure work?
A recruiter commission structure sets the share of a placement fee that goes to the recruiter. Agencies usually pay either a base salary plus commission, or straight commission on a split of the fee. Independents keep the whole fee. The exact percentages vary by firm and are set in each contract (US view, 30 Oct 2026).
At a glance
- Independent: you keep 100% of the fee your client pays, minus your own costs and taxes.
- Agency, straight commission: you get a percentage of each fee you bill.
- Agency, base plus commission: a lower salary plus a smaller percentage.
- Split placement: two recruiters share one fee (see below).
What are the common structures?
| Structure | How you are paid | Best for | Main risk |
|---|---|---|---|
| Independent / own desk | Whole fee from client | Experienced recruiters with clients | Irregular income; you carry all costs |
| Straight commission at an agency | Percentage of fee, often rising in tiers | Producers who want upside | No income until a placement starts |
| Base plus commission | Salary plus lower percentage | Newer recruiters | Lower upside |
| Draw against commission | Advance, repaid from future commission | Ramp-up | Debt if you do not produce |
| Split placement (two recruiters) | Fee shared, e.g. 50/50 | Job-order holder plus candidate holder | Disputes without written terms |
Percentages used by specific firms are commonly quoted online but vary; we do not state a market average.
Worked example: a tiered agency split
Example only, not a market rate. An agency pays 40% on your billings up to USD 150,000 in the year, 50% from 150,000 to 300,000, and 60% above that. You bill USD 320,000.
- First 150,000 x 40% = 60,000
- Next 150,000 x 50% = 75,000
- Last 20,000 x 60% = 12,000
- Total commission = USD 147,000 before tax.
Worked example: a 50/50 split placement
Example only. A client pays a fee of USD 24,000 (20% of a USD 120,000 base). Recruiter A holds the job order, recruiter B supplies the candidate. They agreed in writing to 50/50. Each receives USD 12,000. If the agreement says 60/40 to the job-order holder, A gets 14,400 and B gets 9,600. Agree the split before submitting the candidate.
What happens if the candidate leaves?
Commission is usually earned when the candidate starts, and paid when the client pays. If the placement falls through inside the guarantee period, a clawback or replacement may apply. Ask for this in writing; see fee agreement template.
Employee or contractor?
Agency recruiters paid on commission can be W-2 employees or 1099 contractors. The IRS test looks at control and independence. If you are classed as a contractor you pay your own self-employment tax.
FAQ
Is commission paid on base salary only? It depends on the agreement. Many define the fee on first-year base; some include bonus. Check the definition.
Can an agency change my split? Only as your contract allows. Get any change in writing.
What does LiveRec take? Nothing from your fees. Recruiters choose a Live Recruiter plan at sign-up; clients pay recruiters directly.
Next step: read how placement fee percentages work.
Related
Sources
- IRS, Independent contractor or employee: https://www.irs.gov/businesses/small-businesses-self-employed/independent-contractor-self-employed-or-employee
This is general information, not legal, tax or immigration advice. Rules change and your situation may differ. Consult a licensed attorney or qualified adviser.