When providing temps the TES is deemed to be the employer and therefore responsible for fulfilling all obligations contained in the Basic Conditions of employment Act and any other statutory requirements.
Please note that these calculations are based on the Basic Conditions of Employment Act and do not consider any specific bargaining council agreements. The recruiter must thoroughly investigate whether any bargaining council agreements operate within a specific client’s industry sector before agreeing a rate.
To properly mark up the temp rate, the TES must consider the costs of managing the temp contract. These could include:
Payroll costs – software, pay slips, bookkeeper etc.
Bank fees – payment of the temp
Salary
Administration
Mark ups vary, depending on internal structures and cost centres. All TES agencies must comply with the same statutory requirements. In general, temp mark ups (including all costs and profits) are between 40 and 50% (including the 20.59% statutory cost as per below). For example: If you pay the temp R20 per hour then you’d likely charge the client R30 per hour.
STEP ONE: Calculate the Number of Working Days per Annum
You must accumulate a provision to pay out a benefit on each hour that the person works.
The temp can only accumulate whilst the person is working. Theoretically one should also take off days for when the temp is sick, but for simplification it has not been done in the example below.
Days in a year 365
Weekends -104
Annual leave -15
Sick leave 0
Family responsibility 0
Paid public holidays -12
234
STEP TWO: Calculation to arrive at the % for accumulation of benefits provision
Statutory benefits Benefit days Calculation Accumulation %
Annual leave 15 15/233 6.41%
Sick leave 10 10/233 4.27%
Family responsibility 3 3/233 1.28%
Paid public holidays 12 12/233 5.13%
17.09%
STEP THREE: Calculation of Statutory Costs
Unemployment Insurance Fund (UIF) 1.00%
Skills Development Levy (SDL) 1.00%
COID 1.50%
Benefits provision 17.09%
TOTAL STATUTORY COST % 20.59%
...
by Danielle Statham