The short answer
Staffing factoring is priced as a percentage of each invoice, usually charged per 30 days the invoice stays unpaid. Typical quotes run from about 1% to 5% of invoice value, and some factors price weekly at under 1% for each week outstanding. Advances usually run from 80% to 95% of the invoice.
On a $20,000 weekly invoice at 1.8% per 30 days, paid in 40 days, the fee is $480, or 2.4% of the invoice. That buys payroll cash the day after you bill instead of six weeks later.
Because staffing agencies factor every week, small differences in the rate add up fast. A half-point difference on $80,000 of weekly billing is more than $20,000 a year, so the way the fee is charged matters as much as the headline number.
What staffing factoring costs, line by line
| Cost item | Typical range | How it works |
|---|---|---|
| Factoring rate | about 1% to 5% per 30 days | Charged on the invoice amount for each period it is unpaid |
| Weekly pricing | under 1% per week at some factors | Same idea, shorter periods |
| Advance rate | 80% to 95% | Paid to you when the invoice is verified |
| Reserve | 5% to 20% | Released when the client pays, minus the fee |
| Setup or due diligence fee | none to a one-time charge | Covers client credit checks and lien searches |
| Transfer fees | small per-transfer charges | ACH or same-day wire to your payroll account |
| Monthly minimum | varies | Some contracts charge if volume drops below a floor |
These are typical quotes, not offers. The factor sets your pricing after reviewing your clients' credit and your billing volume.
How the fee is charged
The most important line in a staffing quote is how days are counted.
Prorated daily. The rate is per 30 days but charged for the actual days the invoice is open. An invoice paid in 40 days at 1.8% costs 2.4%.
Full periods. Any part of a 30-day period counts as a whole period. The same invoice paid in 40 days costs two full periods, or 3.6%. That one clause can add half again to your cost.
Weekly periods. Some staffing factors charge per 7 or 10 days. This can be cheap when clients pay quickly and expensive when they do not.
Ask every factor to show the fee on the same invoice at 30, 45 and 60 days, then compare against your real client payment times.
A worked example
A light-industrial staffing agency bills one client $20,000 a week on net 30 terms, and the client usually pays in 40 days. The factor offers a 90% advance and 1.8% per 30 days, prorated by the day.
| Step | One weekly invoice |
|---|---|
| Invoice amount | $20,000 |
| Advance paid within a day of verification (90%) | $18,000 |
| Reserve held back (10%) | $2,000 |
| Factoring fee (1.8% × 40/30 days) | $480 |
| Reserve released when the client pays | $1,520 |
| Total received | $19,520 |
The agency gets $18,000 in time for Friday payroll. Over a month of four weekly invoices, the fees are about $1,920, or roughly $23,000 a year at this volume. If the same quote counted full 30-day periods instead of prorating, each invoice would cost $720 and the year would cost about $35,000. Same rate, very different bill.
Run your own numbers
The calculator below starts with the example above. Enter your own weekly invoice, the advance and rate from your quote, and how long your clients actually take to pay. Switch the fee method to match the wording in your agreement.
Your results
- Cash today (advance)
- $18,000.00
- Reserve held back
- $2,000.00
- Total cost (factoring fee)
- $480.00 (2.4% of invoice)
- Rebate when your customer pays
- $1,520.00
Fee periods charged: 1.33.
Estimates only. Actual rates and advances are set by each factoring company.
What drives your rate
Who your clients are. Factors underwrite your clients, not you. Invoices to large companies with strong payment records price lower than invoices to small or slow-paying clients. One client making up most of your billing can raise the rate or lower the advance.
How fast clients pay. On any per-period pricing, every extra week costs money. Clients who approve timesheets late and pay in 60 days cost far more to factor than clients who pay in 30.
Weekly volume. Steady, larger billing usually earns a lower rate. Seasonal agencies may pay more in slow months if the contract has a minimum.
Timesheet and approval quality. Factors verify that the work was done and approved. Signed or system-approved timesheets and clean invoices speed funding and reduce disputes. Weak approvals slow verification and can raise pricing.
Payroll tax status. Factors check for unpaid payroll taxes because a federal tax lien can come ahead of the factor's claim. An agency behind on payroll taxes will find factoring harder to get and more expensive.
Extra services. Some staffing factors bundle back-office services such as payroll processing, invoicing and collections. That can be worth paying for, but price it separately so you know what the factoring itself costs. If you need funding for payroll specifically, the payroll funding hub covers that structure.
Recourse and client credit
Most staffing factoring is recourse: if a client does not pay within an agreed window, often 90 days, you buy the invoice back or replace it with a new one. Non-recourse programs exist for staffing, but they usually cover only a client's insolvency, not a dispute over hours or a client that is simply slow, and they cost more.
Because the factor is relying on your clients, it will run credit checks on each one and set a limit on how much it funds against any single client. If you land a large new account, ask the factor to approve its credit before you start billing, not after. An unapproved client can mean payroll you expected to fund does not get funded.
How to compare quotes
- Get the fee on the same invoice at 30, 45 and 60 days from each factor.
- Confirm whether periods are prorated, full, or weekly.
- List every fee outside the rate, including setup, transfer and minimum charges.
- Check the contract term, notice period and any fee to leave.
- Run each offer against one recent month of your real invoices and payment dates.
The staffing factoring hub lists factoring companies that work with agencies, or use Get a Quote below. For a view across all industries, see what invoice factoring costs.
Frequently asked questions
What is the typical factoring rate for a staffing agency?
Most quotes run from about 1% to 5% of the invoice, usually charged per 30 days the invoice is unpaid. Agencies with strong clients and steady volume tend to land at the low end. Some factors price weekly, often under 1% per week.
How much of a staffing invoice will a factor advance?
Usually 80% to 95%. The rest is held as a reserve and returned, minus the fee, when your client pays. A lower advance is common when one client makes up most of your billing.
Can factoring cover weekly payroll?
Yes, that is the main reason staffing agencies factor. You submit approved timesheets and invoices each week, and the advance usually arrives within a day of verification, in time for payroll.
Why does the way days are counted matter so much?
Because staffing agencies factor every week, a clause that counts any part of a period as a full period can raise the real cost by half or more on invoices paid just past 30 days. Ask for the fee at 30, 45 and 60 days in writing.
Will unpaid payroll taxes stop me from factoring?
They can. A federal tax lien may take priority over the factor's claim on your invoices, so factors check payroll tax status before funding. Agencies with a payment plan in place can sometimes still qualify, usually on stricter terms.