How much does it cost to start a recruitment agency?

A solo recruitment agency run from home costs about £5,000 to £8,000 in its first year in the UK, €6,000 to €10,000 in Ireland, A$9,000 to A$13,000 in Australia and $7,000 to $11,000 in the US. The big lines are insurance, LinkedIn Recruiter and an accountant. Company set-up is £100 in the UK, €50 in Ireland and A$636 in Australia. One perm placement usually pays for the whole year.

I have spent more than 20 years building software for recruitment agencies, and I have watched a lot of good recruiters go out on their own. The ones who do well keep their costs tiny for the first six months and spend their time on clients. This is what that year actually costs, line by line. For the full start-up checklist, see our guide on how to start a recruitment agency.

Year one costs at a glance

These are typical first-year costs for one person working from home in the UK, Ireland, Australia or the US, checked in October 2026.

Starting a recruitment agency in the UK

The UK is one of the cheapest places in the world to start an agency.

• Limited company: £100 to incorporate online at Companies House (the fee went up from £50 on 1 February 2026). Your accountant can do it for you, often free with their package.
• ICO data protection fee: £52 a year for a small business. Pay it before you hold a single CV.
• Insurance: professional indemnity and public liability, plus employers liability once you hire. Budget £1,000 to £1,500 a year for a solo perm desk. Contract and temp work costs more to insure.
• Licence: none for a recruitment agency. You follow the Conduct of Employment Agencies and Employment Businesses Regulations 2003. You only need a GLAA licence to supply workers into farming, food processing, packaging or shellfish gathering.
• Business bank account: free with most high street and online banks.

Starting a recruitment agency in Ireland

Ireland is cheap to set up, with one extra step: the licence.

• Limited company: €50 to register online with the CRO.
• Employment agency licence: €500 a year from the Workplace Relations Commission, under the Employment Agency Act 1971. Every agency needs one, perm included. Apply before your first placement and renew it each year.
• Insurance: professional indemnity and public liability, about €1,000 to €2,000 a year. Add employers liability when you hire.
• Tax: register for corporation tax and VAT with Revenue, free.
• Job boards: IrishJobs is the big local board. Post free where you can and buy an ad when a role needs it.

Starting a recruitment agency in Australia

Australia costs a little more to set up, and fees are bigger too.

• Proprietary company: A$636 to register with ASIC, from 1 July 2026, plus an annual review fee each year after.
• ABN and GST: free. Register for GST once you expect to turn over A$75,000, which one or two placements will do.
• Insurance: professional indemnity and public liability, about A$1,500 to A$2,500 a year. Add workers compensation when you hire.
• Licence: none for permanent recruitment anywhere in Australia. Supplying temps or contractors (labour hire) needs a licence in Queensland, Victoria, South Australia and the ACT.
• Job boards: SEEK is the one that matters. Post free where you can and buy a SEEK ad when a role needs it.

Starting a recruitment agency in the US

An LLC costs $50 to $500 to form, depending on the state, and some states charge an annual fee on top. Most states need no licence for an agency paid by employers. A few, New York among them, license employment agencies, so check with your state labor department before your first placement. Insurance runs about $1,500 to $3,000 a year.

The costs you can skip in year one

The best new agencies keep their spend small until the fees come in. You can leave these until later.

• An office. Work from home and meet clients at their offices or online.
• Paid job board packages. Buy single ads when a role needs one, never a year up front.
• A website build. A one-page site with your niche, your fee and a contact form is plenty.
• Long software contracts. Pick tools you can pay for monthly, or that are free while you start.
• Staff. Hire your first consultant when you have more roles than you can fill well.

When one placement pays for the year

This is the part that makes starting an agency such a good move. At an 18% fee on a £45,000 salary, one placement is worth £8,100. That covers a whole year of UK costs. In Australia, a 15% fee on a A$95,000 salary is A$14,250, which covers the year too. In Ireland, a 20% fee on a €60,000 salary is €12,000.

Most solo agencies make their first placement within three months. If you make one placement a month from month three, you are back in profit in month three and well ahead by the end of the year. Put in your own numbers with the break-even calculator on our start-up guide.

What the money really goes on

The cash is small. The real cost of year one is your time: the months before your first fee, when you are calling clients and building a shortlist with no salary coming in. Plan for three to six months of personal living costs before you resign. That buffer matters more than any line above.

The other cost people miss is restrictive covenants. Read your current contract before you leave. Knowing exactly which clients and candidates you can call, and from when, decides how fast your first fee lands. An hour with an employment lawyer is the best money you will spend.

Lovelio Launch: your ATS free for 2 months

If you are starting your own agency, Lovelio Launch gives you the Solo plan free for your first two months, with the AI included. You get your jobs, candidates, clients and placements in one place from day one, and Lovelio does the admin so you spend your time on the phone. Apply on the Launch page.

Questions people ask

Can I start a recruitment agency with no money? Almost. Company set-up is £100 in the UK and your software can be free while you start. The money you really need is three to six months of living costs while you win your first fee.

How much does it cost to start a recruitment agency in London? The same as anywhere else in the UK if you work from home. An office in London adds £500 to £1,000 a month for a desk, which most new agencies skip.

Do I need a licence to start a recruitment agency? Usually not. The UK has no general licence. Ireland is the exception: every agency needs a €500 a year licence from the Workplace Relations Commission. In Australia, permanent recruitment needs none, and labour hire needs one in four states and territories. In the US, a few states license employment agencies.

How much does a recruitment agency make per placement? Most perm agencies charge 15% to 25% of the first-year salary. On a £45,000 role at 18%, that is £8,100. On a €60,000 role at 20%, it is €12,000. On a A$95,000 role at 15%, it is A$14,250.

What is the biggest cost of starting a recruitment agency? Your own time before the first fee. In cash, insurance and LinkedIn Recruiter are the largest lines.