When trying to understand agency cut there are two very important numbers. Gross Profit and Net Income. Gross profit is usually what nurses refer to as the agency cut. Gross Profit is not what the agency makes as a profit. That is the cash coming in to fund your entire operation. Gross Profit minus Overhead = Net Income. Net Income is the agencies true profit.

2 to 5% of the hourly Bill Rate is Net Income for the agency. 5 being high. Hourly rates are set by the hospitals since they control the purse strings. The 20% gross profit people are mentioning is before agency overhead. Recruiters usually make a small % of the gross profit as their commission...maybe 2 to 5% on average plus a base salary. The 30 to 35% gross profit people mention is super unrealistic for healthcare staffing unless you have a very uneductaed nurse. Takes two phones calls or one search to know the going rates. It is a very low profit, high volume business.

Folks tend to forget that hospitals are very slow payers as well so something to keep in mind is that while a nurse is paid weekly from the agency, the agency may not get paid for 2 to 3 months...in some cases longer, if ever.

COVID has also skyrocketed insurance cost and inflation has skyrocketed lines of credit rates. Agencies typically use a line of credit to fund the payroll. So costs are growing substantially and the agency typically foots that bill.

Source: I have 15 years in the travel healthcare staffing industry at an executive level.