What agencies don’t tell you about their markups
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 found a consistent pattern:
| Agency type | Qual. | Hourly rate | 8h shift + VAT | Total cost | Saving vs Kalendit |
|---|---|---|---|---|---|
| Small independent, EY focus — London-based specialist | Q | £17 | £134 + VAT | £161 | ~8% |
| UQ | £17 | £132 + VAT | £159 | 19% | |
| Small independent — family-run, regional focus | Q | £17 | £136 + VAT | £163 | 9% |
| UQ | £16 | £128 + VAT | £154 | 16% | |
| Mid-size EY specialist — nationwide coverage | Q | £19 | £152 + VAT | £183 | 19% |
| Mid-size EY specialist — strong London & South East | Q | £23 | £188 + VAT | £225 | 34% |
| UQ | £21 | £168 + VAT | £202 | 36% | |
| Large national generalist — education & childcare division | Q | £20 | £155 + VAT | £186 | 20% |
| UQ | £18 | £144 + VAT | £173 | 25% | |
| Large national generalist — UK & international placements | Q | £20 | £156 + VAT | £188 | 21% |
| UQ | £18 | £140 + VAT | £168 | 23% | |
| Large national generalist — flat rate, no qual distinction | Flat | £24–25 | £192–200 + VAT | £230–240 | ~32–35% |
Source: Kalendit market research 2023–2026. Total cost calculated at 20% VAT on full invoice. Agency descriptions are illustrative; names withheld. Saving vs Kalendit assumes an equivalent booking at a £16/h nursery-set rate.
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.
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 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 nurseries
- 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 educators
- £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
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.
Agency model vs. Kalendit
| Feature | Agency | Kalendit |
|---|---|---|
| Rate setting | Agency sets the rate, no discussion | Nursery decides; educator indicates theirs |
| VAT | VAT on the full invoice | VAT on booking fee only |
| Transparency | Margin hidden inside the rate | 20–23% fee, visible to both sides |
| Pay visibility | Educator pay unknown to nursery | Educator rate visible at booking |
| Quality incentive | No quality incentive for educators | £20/month bonus for 5★ + 8 shifts |
| Continuity | Random practitioner each time | Book the same practitioners repeatedly |
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.
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.
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.
Methodology note: Agency descriptions are illustrative composites drawn from Kalendit’s market research (2023–2026); individual agency names are withheld. Flat-rate figures reflect rates observed among agencies operating in the London area. Educator pay estimates are based on Indeed UK salary data (£12.21–£15/h for early years roles). All calculations assume 20% VAT. Saving vs Kalendit is calculated using a £16/h nursery-set rate with a 20% booking fee and VAT on fee only.