Why the hourly rate does not tell the whole story
Temporary work — also known as labour hire or staff leasing — enables Swiss SMEs to cover operational peaks, replacements or specialist skills without direct hiring. The staffing agency formally employs the worker and makes them available to your company (the client). On the surface the model is simple: you pay an agreed hourly rate. In reality, behind that figure lie intermediary margins, provisions for holiday pay and the 13th salary, social contributions, insurance cover and contractual constraints that affect the full cost and the margins of your projects.
In Switzerland the sector is governed by the Federal Act on Placement Services and the Hiring-out of Employees (Staff Leasing Act, LC/AVG) and the related ordinance. Agencies holding cantonal authorisation for staff leasing must comply with the provisions of the CLA for Personnel Leasing (CLA-P), which among other things requires adherence to the wage and working-time conditions set out in the CLA-P and, where applicable, the CLA in force at your company (Art. 3 CLA-P and Art. 20 LC). This constraint makes the comparison between direct hiring and temporary work more nuanced than a simple hours × rate calculation would suggest.
This guide explains how to reconstruct the true cost of staff leasing, quantify its effect on operating margins and integrate it correctly in accounting — with up-to-date references for 2026 and typical practices among SMEs in Ticino, Zurich and Bern.
At a glance: direct employee vs temporary worker
Before signing a framework contract with an agency, it is worth comparing the two models on a like-for-like basis — same profile, same volume of hours, same period:
| Criterion | Direct hiring | Temporary work (agency) |
|---|---|---|
| Employment relationship | Direct contract with your SME | Contract with the agency; you are the client |
| Formal employer | Your company | The authorised staffing agency |
| Social contributions | Borne by the employer (OASI/DI/IC, unemployment insurance, LPP, accident insurance) | Included in the hourly rate or invoiced separately |
| Holiday pay and 13th salary | Accrued in internal personnel cost | Usually already built into the agency price |
| Equal pay | Remuneration under internal contract | At least equal to CLA-P minimums and, if applicable, the CLA of the hiring company (Art. 3 CLA-P / Art. 20 LC) |
| Flexibility | Notice period and exit costs | Duration tied to the leasing contract; quick extension |
| Administrative cost | Payroll, declarations, internal HR management | Minimal internally; single invoice from the agency |
| Intermediary margin | None | Commission typically 12–25% of payroll cost |
| Accounting treatment | Account 5xxx salaries and social charges | Account 5700 external personnel or 5xxx/6xxx depending on department of use |
| Recommended duration | Structural and recurring roles | Peaks, replacements, fixed-term projects (< 12–18 months) |
The components of true cost
An « all-inclusive » hourly rate breaks down into several layers. Always ask the agency sales contact for a written breakdown before approving the order:
Actual salary and accruals
The base is the worker's gross hourly wage, calibrated to the CLA-P and compliance with applicable wage conditions at your company. The agency accrues holiday pay (approx. 8.33% for 4 weeks), the 13th salary (8.33%), any overtime, Sunday or night premiums, as well as compensation for cantonal public holidays.
If the profile requires a salary above the CLA-P minimum — for example a CNC technician or an experienced project manager — the hourly rate rises proportionally, even if the agency's percentage commission remains similar.
Social and insurance charges
The agency bears employer contributions: OASI/DI/IC (approx. 5.30% employee and 5.30% employer in 2026), unemployment insurance (rate varies by company), LPP according to the chosen fund's regulations, accident insurance (UVG) for occupational and non-occupational accidents, and possibly daily sickness allowance insurance.
Some agencies invoice these charges as separate line items; others incorporate them into the hourly rate. Both approaches are lawful, but only the first allows transparent comparison with direct hiring.
Agency commission and services
The commission covers recruitment, contract administration, payroll management, SECO compliance and credit risk. For operational profiles the commission typically ranges from 15% to 22% of payroll cost; for specialist or executive profiles it may fall to 12–15% on higher amounts.
Check whether replacement costs in case of absence, mandatory training or administrative travel are included. « Hidden » items often appear in the general terms and conditions, not in the initial quote.
Indirect costs for the client
Even with temporary work, internal costs remain: onboarding, supervision, equipment, PPE, access to IT systems, any travel allowances reimbursed directly by you. In cost accounting these costs must be added to the agency invoice to calculate the full project cost.
If the temporary worker uses machinery or premises, your company liability insurance may require notification to the insurer — a detail often overlooked in quick estimates.
Numerical example: reconstructing the full hourly cost
Consider an administrative employee with gross salary equivalent to CHF 5'800 per month at 100% employment, or approx. CHF 31.87 per hour over 182 monthly hours (standard CLA-P working time: 42 hours per week):
| Cost item | Direct hiring | Via agency |
|---|---|---|
| Gross monthly salary | CHF 5'800 | CHF 5'800 |
| Holiday + 13th salary accrual (16.66%) | CHF 966 | Included in agency price |
| Employer contributions (OASI/DI/IC, unemployment, LPP, accident) | CHF 1'045 | Included in agency price |
| Agency commission (~18%) | — | CHF 1'223 |
| Estimated internal HR cost | CHF 180 | CHF 40 |
| Total monthly cost | CHF 7'991 | CHF 8'288 |
| Full hourly cost (182 h) | CHF 43.91 | CHF 45.54 |
In this scenario temporary work costs approx. 3.5% more per month than direct hiring, before considering onboarding and initial productivity. The agency advantage emerges when the need lasts less than 4–6 months: you avoid notice periods, recruitment costs and an unproductive probation period. For a 3-month assignment (CHF 24'864 via agency vs CHF 23'973 direct + CHF 2'500 recruitment), leasing is often competitive despite the commission.
Practical formula for the client: true hourly cost = (agency invoice + internal support costs) ÷ actual billed hours. Billed hours may differ from hours worked due to contractual minimums, quarter-hour rounding or notice clauses in case of early termination.
Impact on project and product margins
The main risk for SMEs is not the rate itself, but failing to integrate temporary cost into margin calculations. An installation company billing a project at CHF 120'000 and estimating internal personnel at CHF 38 per hour can erode operating margin by 4–8 percentage points if it uses temporary technicians at CHF 52 per hour without updating the quote.
To avoid surprises, adopt three operational rules:
- 1.Dedicated cost centre. Create a « Temporary personnel » cost centre and allocate every agency invoice with reference to the project or client. In Accountex, job-order analytics let you compare planned cost with actual cost week by week.
- 2.Realistic quote markup. In client quotes, apply a 5–10% safety factor on outsourced hours or price temporary hours at a selling rate that includes agency commission and indirect costs — not your average internal cost.
- 3.Break-even threshold. Define internally a break-even duration: if the need exceeds that threshold (typically 6–9 months for operational profiles), start direct hiring or a transition (« hire ») procedure offered by many agencies with reduced or waived commission.
Key indicator: contribution margin per job
Contribution margin = Job revenue − Variable costs (materials + temporary personnel + subcontractors + travel). Monitor this indicator monthly: if it falls below your target threshold (e.g. 35% in the services sector), staff leasing is weighing excessively on profitability, regardless of the operational flexibility gained.
Legal constraints that affect cost
Equal pay and CLA-P
Art. 20 LC and the CLA-P require compliance with the wage and working-time conditions set out in the staff leasing CLA and, where applicable, the CLA in force at your company. If a comparable employee of yours earns CHF 6'200 gross under a sector CLA or internal pay practice, the temporary worker cannot be paid below those minimums. Violations expose the agency to sanctions and disputes; in case of irregular hiring-out (lack of authorisation) the supply contract may be void under Art. 22 LC.
Duration of assignment and conversion
The CLA-P does not set an absolute maximum duration with automatic conversion to a permanent contract with the agency. Assignments at the same hiring company are however aggregated over a 12-month period for holiday pay, allowances and notice periods (Art. 5 CLA-P). From the seventh month with the same client, notice to the agency increases to one month. Art. 22 LC also prohibits clauses that prevent direct hiring of the worker at the end of the assignment.
Occupational safety liability
As the client you are responsible for the working environment, training on risks specific to your premises and compliance with the Labour Act (LA). Accidents due to inadequate briefing can generate insurance costs and higher accident insurance premiums, regardless of the agency's cover.
VAT and deductibility
Staff leasing services are generally subject to VAT at 8.1% (2026). If your SME is registered for VAT, the tax is deductible as input tax, reducing the effective net cost. In margin calculations always use the net VAT amount for consistency with taxable revenue.
Accounting treatment and management control
In Swiss accounting, staffing agency invoices are typically recorded as personnel cost or as direct job cost, depending on the chart of accounts adopted (SME standard or custom structure):
| Transaction | Suggested account | Note |
|---|---|---|
| Agency invoice for production | 5000 Salaries / 5700 External personnel | Analytical allocation to project |
| Agency invoice for administration | 6200 Administrative expenses | If the profile is internal support |
| 8.1% VAT on invoice | 1170 Pre-reconciled VAT | Deduction if VAT-registered |
| Travel reimbursement to temporary worker | 6300 / 6500 depending on nature | Do not forget in job cost |
Reconcile every invoice with the approved timesheet: verify that billed hours match internally recorded attendance. Monthly rounding errors can create variances of 2–4% — significant on multi-year contracts. In Accountex, linking the supplier invoice to the cost centre and attaching the signed timesheet simplifies internal review and dialogue with your accountant at year-end closing.
How to negotiate with the agency and when it pays off
Price is not set in stone. SMEs with recurring needs — even seasonal ones — can negotiate declining rates by volume, reduced commissions after a trial period or direct-hire transition clauses without excessive penalties. Ask explicitly for:
- Itemised breakdown of the hourly rate (salary, charges, commission)
- Conditions for extension or early termination of the leasing contract
- Replacement cost in case of unsuitability or prolonged absence
- Written documentation of pay alignment with your internal salaries
- Salary adjustment index linked to CLA-P trends or inflation
✓
Temporary work makes sense
Seasonal peaks, sick leave cover, projects with a fixed deadline, rare skills for less than 6 months, trial phase before direct hiring.
✗
Not recommended
Core permanent roles, stable need beyond 12–18 months, functions with critical know-how to retain, situations where equal pay eliminates the cost advantage.
?
Evaluate case by case
Business transitions, expansion into new cantons, night-shift cover hard to recruit locally, replacement during notice period of a departing employee.
Checklist for business owners
Before starting a relationship with a staffing agency, check these points to calculate true cost and protect margins:
Request a breakdown of the hourly rate into salary, social charges and commission — preferably in writing in the order or framework contract.
Compare with the full hourly cost of an equivalent internal employee, including holiday pay, 13th salary, LPP and HR costs — not gross salary alone.
Estimate the actual duration of the need and calculate break-even against direct hiring, including recruitment and onboarding.
Update quotes and selling prices if temporary personnel are used on fixed-margin jobs — do not silently absorb the difference.
Set up cost centres and weekly checks of billed vs approved hours, with monthly reconciliation in accounting.
Verify cantonal authorisation for staff leasing (and, if applicable, federal SECO authorisation for cross-border activity) and CLA-P compliance; keep documentation on equal pay and safety briefing.
Plan transition or exit before the assignment extends beyond the economic break-even threshold, remembering that Art. 22 LC guarantees the freedom to hire the worker directly at the end of the assignment.
Temporary work remains a valid tool for Swiss SMEs that know how to quantify its full cost and integrate it into margin management. The hourly rate proposed by the agency is only the starting point: true cost — and its effect on profitability — emerges only when you compare it with the direct alternative, allocate it correctly to jobs and monitor it with the same rigour applied to other operating costs.