Recruitment agency invoice template: placement fee, retained search stages and a guarantee credit note
On this page
- What does a placement fee invoice need to show?
- When should you send the invoice?
- Template 1: permanent placement fee invoice
- Template 2: retained search installment invoice
- Template 3: credit note for a guarantee refund
- A filled example
- The cover email
- What else should you check before you send it?
- Questions people ask
A recruitment agency invoice for a permanent placement bills the fee your signed agreement sets, so it has to tie back to that agreement: the candidate's name, title and start date, the fee basis and percentage (or flat fee), the amount, the payment terms and due date, the client's purchase order number if it uses one, and a reference to the guarantee. Retained searches are invoiced in installments at the stages the agreement names, and a guarantee refund is handled with a credit note against the original invoice, never by editing it. The templates below are ready to copy; every bracket is something to change.
The invoice cannot fix a vague agreement. If the fee trigger, the fee basis or the guarantee is unclear, settle it first with the placement fee agreement template or the retained search agreement template.
What does a placement fee invoice need to show?
| Field | Why it matters |
|---|---|
| Your legal name, address, tax ID if the client asks | Clients' accounts payable teams match invoices to a vendor record |
| Invoice number and date | Unique and sequential; the credit note will refer to it |
| Client legal name and billing contact or AP email | Invoices sent to the hiring manager often sit unpaid |
| Client PO number | Many clients cannot pay an invoice without one; ask for it at offer stage |
| Agreement reference | The signed terms that set the fee and guarantee |
| Candidate, job title, start date | Identifies the placement and fixes the guarantee period |
| Fee basis, percentage and amount | Shows how the fee was calculated under the agreement |
| Tax, if any | Only where it applies; see the notes below |
| Payment terms and due date | "Net 30" plus the actual date, so there is no argument about when the clock started |
| Remittance details | Bank details by secure channel; never change them by email alone |
When should you send the invoice?
On the day the trigger in your agreement happens, not when you get round to it. The common triggers:
| Arrangement | Typical trigger in the agreement | What to put on the invoice |
|---|---|---|
| Contingency, fee on start | The candidate's first day | Start date, and terms counted from it |
| Contingency, fee on acceptance | Written offer acceptance, with payment due after the start | Acceptance date, start date and the later due date |
| Retained search | Signature, shortlist or another named stage, then the start | Installment number, the stage reached, and fees already paid |
| Temp-to-perm conversion | The client hires your temp directly | Hours worked before conversion and the conversion fee schedule |
Conversion fees often follow a schedule that falls as the temp's hours rise; see temp-to-perm conversion fee for how those clauses are written. Number invoices and credit notes in separate sequences (for example INV- and CN-), so a credit can never be mistaken for a payment request.
Template 1: permanent placement fee invoice
[AGENCY LEGAL NAME]
[Address] | [Phone] | [Billing email]
[Tax ID / EIN, if requested]
INVOICE
Invoice number: [INV-2026-0142]
Invoice date: [date]
Due date: [date] Terms: [Net 30 from invoice date]
Client PO: [PO number]
Bill to:
[Client legal name]
Attn: [Accounts payable / billing contact]
[Address] | [AP email]
Agreement: [Contingency Recruitment Agreement dated (date)
/ Role Schedule (number)]
PLACEMENT
Candidate: [Full name]
Position: [Job title], [department / location]
Offer accepted: [date]
Start date: [date]
FEE
Fee basis: [First-year base salary of $(amount), as defined in
clause (x) of the Agreement]
Fee rate: [20]%
Placement fee: $[amount]
[Tax: (rate)% (state), if applicable] $[amount]
TOTAL DUE: $[amount]
Guarantee: [90]-day [replacement / refund] guarantee from the
start date under clause [x], ending [date].
PAYMENT
[ACH / wire]: [Bank name], account name [ ], routing [ ], account [ ]
Please quote invoice [number] with your payment.
Questions: [name], [email], [phone]Notes on what to change:
- Fee basis. Copy the definition from your agreement word for word: first-year base salary, total first-year cash, or a flat fee. If the agreement includes a target bonus in the basis, show both figures.
- Salary on the invoice. Some clients prefer the salary not to appear on a document that passes through accounts payable. If so, write "fee as agreed under Role Schedule [number]" and attach the schedule to the hiring manager's copy only.
- Terms. Use the terms in the agreement. If they say "30 days from start date," write that and the date it produces.
- Guarantee end date. Calculate it and print it. It ends arguments about whether a departure falls inside the period.
Template 2: retained search installment invoice
INVOICE [number] Date: [date]
Bill to: [Client legal name], Attn: [name] PO: [number]
Agreement: [Retained Search Agreement dated (date)]
Search: [Position title], [location]
Installment [1] of [3]: [Retainer on signature of the Agreement]
Estimated fee: [33]% of estimated first-year cash
compensation of $[amount] = $[amount]
This installment: one third of the estimated fee $[amount]
[Installment 2 of 3: on presentation of the shortlist on (date)]
[Installment 3 of 3: on the candidate's start date, adjusted to
the actual first-year cash compensation of $(amount):
Final fee $(amount) less installments paid $(amount) = $(amount)]
TOTAL DUE: $[amount]
Terms: [Net 30]. Due date: [date].
[Expenses billed separately under clause (x), with receipts.]The third installment is where retained invoices go wrong: the final fee is usually recalculated on the actual compensation, so show the full fee, what has been paid, and the balance. The installment schedule itself is worked through in the retained search agreement template.
Template 3: credit note for a guarantee refund
CREDIT NOTE [CN-2026-0007] Date: [date]
Against invoice: [INV-2026-0142] dated [date], paid [date]
Client: [Client legal name] PO: [number]
Candidate [name], [job title], started [date] and left on [date],
day [n] of the [90]-day guarantee under clause [x] of the
[Agreement]. The client notified us on [date], within the notice
period in clause [y].
Under clause [x], a departure in days [31 to 60] earns a refund of
[50]% of the fee paid.
Fee paid: $[amount]
Credit ([50]%): $[amount]
[Tax credit, if tax was charged] $[amount]
TOTAL CREDIT: $[amount]
This credit will be [refunded by ACH within (n) days / applied to
the next placement fee invoiced to you before (date)].If your guarantee is a free replacement rather than a refund, you usually do not need a credit note at all; send a short letter confirming the replacement search, and invoice nothing for the replacement hire. The choice between replacement and refund, and the conditions that keep a guarantee fair, are covered in placement guarantee period.
A filled example
Example (invented client, candidate and figures): a contingency agreement sets a fee of 20% of first-year base salary, payable 30 days from the start date, with a 90-day guarantee: full refund for a departure in the first 30 days, 50% in days 31 to 60, 25% in days 61 to 90.
Invoice INV-2026-0142: Jordan Reyes, Senior Accountant, started November 3, 2026. Base salary $85,000; fee 20% = $17,000. Due December 3, 2026. Guarantee ends January 31, 2027.
Jordan leaves on December 19, day 47. Credit note CN-2026-0007: 50% of $17,000 = $8,500, applied to the next placement fee invoiced before June 30, 2027, as the agreement allows.
The cover email
Subject: Invoice [number]: [Candidate name], [Job title], PO [number]
Hi [AP contact],
Attached is invoice [number] for the placement of [Candidate name] as
[Job title], who started on [date]. The fee is $[amount], due [date]
under our agreement dated [date]. [PO (number) is quoted on the
invoice.]
[Hiring manager name] is copied for approval. If you need anything
else to process it, such as a W-9 or a supplier form, let me know and
I'll send it today.
Thanks,
[Name]What else should you check before you send it?
- Supplier setup. Large clients pay only vendors set up in their system. Send your W-9 and any supplier forms at offer stage, not after the start. For their part, payments to corporations are generally not reported on Form 1099-NEC, according to the IRS (Instructions for Forms 1099-MISC and 1099-NEC, checked October 2026), but clients will still ask for the form.
- Sales tax. Some states tax certain staffing or employment services. South Dakota's Department of Revenue, for example, says a temporary help agency pays sales tax "on all fees charged to the client" (South Dakota DOR tax fact; more in staffing agency license in South Dakota). Whether a permanent placement fee is taxable depends on the state, so ask your accountant.
- Revenue you may give back. Public staffing companies account for guarantee refunds as they go: Kforce records direct hire revenue "net of a fallout reserve" (Kforce Form 10-K, 2025). A small agency can do the same informally by not spending a fee until its guarantee has passed.
- Late payment. Charge interest or a late fee only if your signed agreement provides for it.
- Records. Keep the offer letter or the client's written confirmation of the start date with the invoice; it is your evidence if the fee or the guarantee dates are disputed. Negotiating the fee itself is covered in how to negotiate recruitment fees.
Questions people ask
What should a recruitment agency invoice include?
The agency's legal name and address, invoice number and date, the client's legal name and billing contact, the client's purchase order number if it uses one, the candidate's name, job title and start date, the fee basis and percentage or flat fee as set by the signed agreement, the fee amount, any tax, the payment terms and due date, the guarantee terms by reference, and remittance details.
When should a recruiter send the placement fee invoice?
When your agreement says the fee is earned or payable. Many contingency agreements make the fee payable on or after the candidate's start date; others invoice on acceptance with payment due after the start. Send it the day the trigger happens, and put the start date on the invoice so the due date and the guarantee period are unambiguous.
How do I invoice a guarantee refund?
Issue a credit note that references the original invoice, states the candidate's departure date, the guarantee clause and the refund percentage or amount it produces, and says whether the credit will be paid back or applied to a future fee. Do not edit or void the original invoice once it has been paid.
Do recruitment agencies charge sales tax on placement fees?
It depends on the state and the service, and the rules differ for permanent placement and temporary staffing. South Dakota, for example, taxes temporary help services. Ask your accountant whether your fees are taxable where your client is located before you add or leave out a tax line.