If I have $100 to pay someone in the US, about 25% of that will go to "fringe" (taxes, health insurance, unemployment/worker's comp, 401k match, PTO/sick, etc) and that percentage is probably higher for lower-paid employees. So, start with $100, fringe expenses take $25-30, agency middleman profit/overhead/flex-risk takes maybe 20% ($20), and the end worker gets $50-55 out of the $100 the original company is paying for them.
That the end worker is getting ~50% isn't that crazy to me. If directly employed, they'd be getting only about ~65-70%. (which is less than the direct fringe ratio because someone has to fade the PTO/sick/hiring lag flex to ensure the trash cans get emptied consistently and the agency is doing that in the other case).
All those taxes are already being paid. It’s to ensure that the contract worker gets worse insurance and next to no benefits and therefore costs less, and also so that you can get rid of them whenever you want for someone even cheaper.
I was responding to "They’re paid 50% of what their contracting agency is paid for them" and the contracting agency is paying those fringe items out of "what their contracting agency is paid for them".
That the end worker is getting ~50% isn't that crazy to me. If directly employed, they'd be getting only about ~65-70%. (which is less than the direct fringe ratio because someone has to fade the PTO/sick/hiring lag flex to ensure the trash cans get emptied consistently and the agency is doing that in the other case).