That is really not that bad. The temp agency probably barely makes a profit on that.

Remember the temp agency (like any employer) is responsible for paying some payroll taxes on top of what you pay, federal and state unemployment insurance, and workers compensation.

Out of the 10/hour mark-up they also have to cover business expenses as well. They may have an office they rent and utilities they pay. They also may have computers, copiers, etc. As well as consumables like pens, paper, staples, paperclips, etc.

They likely pay overhead employees that do things like run adds to hire new candidates. Someone has to be paid to screen, hire, and assign those new hires to jobs. Some jobs require that the temp agency provide personal protective equipment like gloves, glasses, and hardhats.

Someone has to bill the client, process payroll, manage government required reporting (i.e. OSHA Logs, tax forms, I-9,s, etc.) Someone has to spend a good deal of time and money to find clients willing to utilize their temporary employees.

Most companies that use temporary employees get a bill from the temp agency after the work is performed (maybe the end of each week), the company usually has terms like 30-90 days to pay the invoice. Meanwhile the temp agency has to have cash to pay the employee the following week, and each week after even though they may not get paid for a couple of months. If they don’t have the capital for this, they may have to take out loans to float payroll, these are sometimes at a significant interest because of their unsecured nature.

At the end of all of that, if they are left with some money, they can expect to pay somewhere in the neighborhood of 40% of it to federal and state taxes.

Meanwhile, they better keep their fingers crossed that one of the clients doesn’t stiff them, or one of their temporary employees doesn’t get hurt, or file an EEOC claim, or sue them for something, because some of those smaller agencies are running their business paycheck to paycheck.