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Placement Fees Calculation

When you make a placement of a candidate the system will display a placement form for you to complete details about the placement.

For Permanent placements this will include details of the candidate salary and fee rate.
There are several salary related fields which can be used in the calculation of placement fees and are explained below:


First Year Salary: This is the annual salary that the candidate will be earning during the first year after any probationary period (See below for Guaranteed Salary and Period of Guarantee).

Guaranteed Salary: This is used to record the annual salary that a candidate will earn during any probationary period for which they have been guaranteed a level of earnings.

Period of Guarantee: This is the length of the 'probation' period during which they will earn the Guaranteed Salary specified above.

Average Salary: This will be calculated by the system using the First year salary, Guaranteed Salary and Period of Guarantee to work out what the candidate will earn during their first year, although it is possible to over-type this with another value if you like.

Fee Rate: The fees which will be charged expressed as a percentage.

Total Fee Due: This will be calculated by multiplying the Average Salary x Fee Rate
(NB: Automatic calculation can be turned off with parameter RECB,Flag(34) )


How It Works

It is probably best illustrated with some examples.

Example 1

 A candidate may be placed, and had a probationary period of 3-months during which they would be on an annual salary of £12,000 (i.e. £1000/month). After completion of the probationary period, they would then be moved to an annual salary of £18,000 (i.e. £1500/month)

This would be entered as below:

First Year Salary
£18,000
Guaranteed Salary
£12,000
Period of Guarantee
3 (months)
Average Salary
£16,500


The average salary is calculated as: 3months @ £12,000 Per Annum and 9months @ £18,00 per Annum


Example 2

 A candidate is placed with no probationary period. with an annual salary of £24,000 (i.e. £2000/month)

This would be entered as below:

First Year Salary
£24,000
Guaranteed Salary
<Blank>
Period of Guarantee
<Blank>
Average Salary
£24,000


In this case because there is no probationary period, there is no need to use the Guaranteed Salary fields.


Example 3

 A candidate is placed with a year-long probationary period at a salary of £35,000 (Perhaps because of a guarantee on commission during their first year), and then his annual salary will DROP to £29,000 per year.

This would be entered as below:

First Year Salary
£35,000
Guaranteed Salary
£35,000
Period of Guarantee
12 (months)
Average Salary
£35,000


In this case both the guaranteed salary and the First year salary are the same.

*NB: You could record their salary of £29,000 as their 'First Year Salary', meaning their first year after their probation period and still get the same results, i.e.

First Year Salary
£29,000
Guaranteed Salary
£35,000
Period of Guarantee
12 (months)
Average Salary
£35,000

The Average Salary remains at £35,00 because the period of the guarantee is 12 months

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  1. Graeme Orchard

  2. Posted
  3. Updated

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