What agencies don’t tell you about their markups
Bridging the gap: Why high agency markups are leaving nursery budgets and educators behind.
Every nursery manager knows the anxiety: a practitioner calls in sick at 6am, ratios need covering before the doors open, and the agency is the only number in the phone. You accept whatever rate they quote — because the alternative is an Ofsted breach.
Early years staffing agencies have built their business model around exactly this moment. And for years, neither nurseries nor educators have had the information to push back. This post changes that.
The number nurseries see — and the number they don't
When a traditional agency invoices a nursery, the charge appears as a single hourly or daily rate: clean, simple, seemingly straightforward. What's not visible is how that rate breaks down — specifically, how much reaches the practitioner on the ground and how much stays with the agency.
Our research across the UK early years agency market — covering small independents, mid-size early years specialists, and large national generalist recruiters — found a consistent pattern:
| Agency type | Qual. | Hourly rate | 8h shift + VAT | Total cost | Saving vs Kalendit |
|---|---|---|---|---|---|
| Small independent, early yearsLondon-based, specialist EY focus | Q | £17 | £134 + VAT | £161 | ~8% |
| UQ | £17 | £132 + VAT | £159 | 19% | |
| Small independent, early yearsFamily-run, regional focus | Q | £17 | £136 + VAT | £163 | 9% |
| UQ | £16 | £128 + VAT | £154 | 16% | |
| Mid-size early years specialistNationwide coverage | Q | £19 | £152 + VAT | £183 | 19% |
| Mid-size early years specialistStrong London & South East presence | Q | £23 | £188 + VAT | £225 | 34% |
| UQ | £21 | £168 + VAT | £202 | 36% | |
| Large national generalistEducation & childcare division | Q | £20 | £155 + VAT | £186 | 20% |
| UQ | £18 | £144 + VAT | £173 | 25% | |
| Large national generalistUK & international placements | Q | £20 | £156 + VAT | £188 | 21% |
| UQ | £18 | £140 + VAT | £168 | 23% | |
| Large national generalistEarly years & education specialist | Q | £20 | £157 + VAT | £189 | 21% |
| UQ | £17 | £132 + VAT | £159 | 19% | |
| Large national generalistFlat rate, no qual/unqual distinction | Flat | £24–25 | £192–200 + VAT | £230–240 | ~32–35% |
Source: Kalendit market research 2023–2026. Total cost calculated at 20% VAT applied to the full invoice. Agency descriptions are illustrative; names withheld. Saving vs Kalendit assumes an equivalent booking at a £16/h nursery-set rate.
The flat-rate trap: Some agencies operating around London charge a flat rate of around £24–25/h with no distinction between qualified and unqualified practitioners. For an 8-hour shift, that's upwards of £230 all-in. The nursery pays a premium rate regardless of role; the practitioner earns the same whether they hold a Level 3 qualification or not. Neither party benefits from the distinction that should matter most.
The hidden markup: what educators actually receive
The real story of agency pricing isn't just what nurseries pay — it's the gap between that and what reaches the educator. Agencies are not required to disclose their pay-to-charge ratio, and most don't.
Based on industry salary data, the average early years practitioner earns between £12.21 and £15/h — with qualified Level 3 staff typically at the upper end of that range. Agency-placed temporary workers generally earn at or modestly above National Living Wage, often with holiday pay "rolled up" into the hourly rate rather than accrued separately.
to the educator
charges the nursery
practitioner pay
not just the agency fee
On a typical 8-hour shift, the practitioner takes home roughly £97–£120. The nursery pays £154–£240 including VAT. The agency keeps the difference — often £50–£110 per shift — with no transparency to either party about how it's calculated.
The VAT sting: Agencies apply VAT to the entire invoice — practitioner pay and agency margin combined. Nurseries that are VAT-registered can reclaim it. Many smaller settings are not, meaning they absorb a 20% surcharge on every booking with no route to recovery.
"The agency charges the nursery £23/h, pays the practitioner £13/h, and presents both transactions as a single, non-negotiable rate. Neither party knows what the other agreed to."
Two parties, both losing out
The opacity of traditional agency pricing doesn't just cost nurseries money — it actively suppresses educator earnings and removes any incentive for quality.
What the current model costs you
- Paying £154–£240 per shift, with the margin buried in the rate
- VAT on the full invoice, not just the agency fee
- No say in what the practitioner is paid
- No guarantee of the same practitioner twice
- Emergency dependency: agencies know you'll pay whatever they ask at 6am
What the current model costs you
- £12–15/h while the nursery pays £17–25/h for your work
- Holiday pay often rolled into the rate rather than accrued
- No visibility of what the nursery is actually charged
- No reward for quality — a 5-star practitioner earns the same as an average one
- Loyalty to an agency earns you nothing; they move to the next available worker
A different model entirely
Kalendit was built on the premise that both sides of a booking deserve transparency — and that a platform fee should be visible and proportionate, not hidden inside a rate neither party can interrogate.
Nurseries set the rate
You decide the hourly rate for each booking based on role and budget. No rate card imposed from outside.
Educators indicate their rate
Practitioners tell the platform what they need to earn. Transparent matching — the nursery knows what the educator receives.
Nurseries pay 20–23%
Kalendit's booking fee is 20–23% on top of the agreed rate. VAT applies only to that fee — not the full booking value.
Educators pay 2–4%
Practitioners pay a 2–4% platform fee depending on usage and loyalty — far less than the margin a traditional agency extracts from their pay.
Quality is rewarded: Educators who maintain a 5-star rating and complete at least 8 shifts per month receive a £20 monthly bonus from Kalendit. Traditional agencies have no incentive to reward quality — their margin is the same regardless of how well the practitioner performs.
Agency model vs. Kalendit
What this looks like in numbers
A nursery covering 10 emergency shifts per month through a mid-tier agency, at an average total cost of £185 per shift, is spending £1,850/month — or £22,200/year on temporary cover. The practitioner doing that work takes home around £1,100 of it.
On Kalendit, with the nursery setting a rate of £16/h for a qualified practitioner: the platform fee (20%) adds £25.60, and VAT applies only to that fee (£5.12). Total per shift: £153.72. The educator takes home £128 after a 2% platform fee — £10–£30 more than the agency would pay them for the same work. Over 10 shifts a month, the nursery saves over £310/month. Across a year, that's more than £3,700 back into the setting.
Scale that across a group of five nurseries each averaging 10 agency shifts a month, and the number becomes north of £18,500 annually — not in added revenue, but in cost simply removed from the equation.
The bigger picture
UK nurseries are already operating under extraordinary cost pressure: staffing ratios among the tightest in the OECD, funding rates for three-and-four-year-olds that have fallen in real terms since 2016, and employer NI increases from April 2025 compounding the squeeze. Early years educators, meanwhile, remain among the lowest-paid graduate-level professionals in the country — a persistent workforce crisis that the sector cannot hire its way out of.
Against that backdrop, agency markups of 90–185% over educator pay — invisible to both parties, magnified by full-invoice VAT — aren't just a pricing quirk. They're a structural transfer of value away from the settings delivering care and the practitioners making it possible.
Transparency isn't just a nice-to-have. In a sector this financially stretched, it's the difference between a nursery that survives and one that doesn't. It's the difference between an educator who stays in the profession and one who leaves it.