IT Consultant Broker Fees: What Are You Actually Paying For?

IT consultant broker fees rarely show up as a line on your invoice. They're the gap between the hourly rate you pay and the rate the consultant actually receives, and that gap pays for finding the person, handling the contract and carrying the risk if something goes wrong. A broker usually earns its fee when you need many contractors or have to buy through a framework agreement, and rarely when you need one developer for one project.

I'm a freelance developer based in Denmark and I work directly with companies, so I have an obvious interest in you skipping the middleman. Read this with that in mind. I've tried to be just as specific about the cases where a broker is the right call.

The short answer: when a broker earns its fee

This is a rough sort, not a verdict. If you haven't decided what kind of help you need yet, start with my guide to hiring a developer. The rest of this post covers what sits behind the fee, and how to buy well if a broker turns out to be right for you.

How the broker model works

A consultant broker sits between you and an independent contractor. "Consultant broker" is the common term in the Nordics. Elsewhere you'll see IT staffing agencies, contractor agencies and talent networks running similar models, with the fee described as a markup or a margin.

In the classic broker model, the broker doesn't employ the consultant. The consultant invoices the broker through their own company, and the broker invoices you. So there are two contracts: yours with the broker, and the broker's with the consultant. You only ever see the first one.

A typical engagement runs like this:

1. You describe what you need: skills, start date, duration and hours per week.
2. The broker sends a handful of CVs, often within a few days.
3. You interview the candidates and pick one.
4. The consultant logs hours, the broker invoices you and pays the consultant.

Ework, a Swedish broker listed on Nasdaq Stockholm with more than 10,000 professionals on assignment, describes the mechanics plainly in its 2025 annual report. It sells consultant hours, with rates set in framework agreements and the call-off contracts under them. Because Ework is the client's contracting party, it's liable to the client for damage its consultants cause. Consultants get paid 3-5 days after the client pays, or earlier if they accept a fee for advance payment.

So the key point is this: your contract is with the broker, not with the person doing the work. It affects everything from who you call when something breaks to who owns what the consultant builds.

Vetted networks like Toptal look much the same from your side, because their cut sits inside the rate too. I've compared the big freelance platforms separately, so this post sticks to brokers.

What the broker's fee pays for

The broker's share isn't pure profit. It covers work and risk you'd otherwise take on yourself:

• Sourcing. A broker knows a large pool of consultants and can often send relevant CVs faster than you could find them.
• One contract, one invoice. One supplier in your procurement system and one monthly invoice, however many contractors you use. That's handy when your consultants sit in different countries.
• Liability. The broker is your counterparty and answers to you, including for damage a consultant causes. You have one party to go to, whoever made the mistake.
• Replacement. If a consultant leaves, the broker usually finds a successor, so you don't start the search from scratch.
• Checks. Some brokers offer background checks and help with security clearance, which can be a requirement in finance and the public sector.
• Framework access. Public bodies in the EU generally have to tender larger purchases. A framework agreement lets them call off consultants for its whole term without running a new tender every time. Under Denmark's Public Procurement Act (in Danish), for example, a framework agreement can normally run for four years at most.

What it doesn't pay for

The big one: you're usually buying hours, not an outcome. Ework's own report treats buying a specific deliverable, rather than labor, as a separate service. That's typical of the model. The broker promises a person with the right skills on paper, not a system that ships on time.

You don't necessarily get a technical assessment either. Whoever screens the CVs isn't always a developer themselves. If nobody on your side can judge technical quality, you face the same problem you'd have hiring directly.

And there's no project management or architecture included. The consultant works to your instructions, so planning, prioritizing and quality control stay with you.

How big is the broker's cut?

Short answer: you rarely know unless you ask. The invoice shows one hourly rate, and the part passed on to the consultant is invisible to you.

One of the few public figures comes from Ework, which reported a gross margin of 4.1% for 2025. Gross margin here is the share of revenue left after the consultants are paid. But Ework is very large, works through many framework agreements and is built on volume. A smaller broker placing a single contractor can keep a much larger share. Most don't publish the figure, so the only reliable way to find out is to ask.

Margin vs markup: ask which one you're hearing

When a broker quotes a percentage, ask what it's a percentage of. A 25% markup on the consultant's rate is a 20% margin on yours. The difference sounds small, but if you're comparing two brokers who quote it different ways, it adds up to real money over a long engagement.

A worked example

I picked these numbers to keep the math simple, not because they're typical rates. 1,600 hours is roughly a year of near full-time work. The point is that a broker's fee isn't a one-off finder's fee. You pay it on every hour, including month 18, when there's nothing left to find.

There's a quieter cost as well. The bigger the broker's share, the lower the consultant's own rate, and consultants with strong networks can pick the work that pays them best. That doesn't make broker-placed consultants worse, but it's one more reason to ask.

When a broker is worth it, and when to go direct

The real question isn't whether brokers are good or bad. It's whether you need what you're paying for.

When the fee is worth paying

• You run many external contractors, and a single agreement saves time in procurement, finance and legal.
• You're a public body or a large company whose purchasing policy requires approved suppliers.
• You need a rare skill quickly, such as a specialist in one particular ERP system, and you don't have the network.
• You need short-term cover, like parental leave or a project with a fixed end date, and want the option to swap the person if it doesn't work out.

In those cases the fee buys something real: speed, a ready-made contract framework and someone responsible for finding a replacement. They're also cases where a single freelancer like me isn't the answer. If you need five developers in two weeks, I can't supply them.

When to go direct

• You need one developer for one well-defined project, and you have time to find them yourself.
• You've already found the person, perhaps through a referral. Paying a broker now means paying for a finished search.
• The engagement will last several years. The fee is charged on every hour, so at some point you've paid for the introduction many times over.
• You want a result at a fixed price. A freelancer or a firm that takes responsibility for delivery fits better than a broker selling hours. If you're weighing firms, I've written about software houses, agencies and consultancies.

If you'd rather find someone directly, here are 11 places to find developers, with an honest take on each.

How to hire through a broker without overpaying: 6 steps

If a broker is the right fit, these six steps make a real difference to what you get for the fee.

1. Decide whether you're buying hours or a result

If the consultant will join your team and work to your priorities, the broker model fits well. If you need someone to take responsibility for delivering a system, say so and ask whether the broker can take that on. If it can't, project management lands on you.

2. Ask what share of the rate goes to the consultant

Ask directly, and ask whether the answer is a margin on your rate or a markup on theirs. Some brokers answer openly. Others call it commercially sensitive. A refusal is still an answer, and a useful starting point for negotiating.

3. Meet the consultant and ask who else is in the chain

Interview the consultant before you sign, ideally with someone technical from your side. Also ask whether the consultant contracts directly with the broker or came in through another intermediary. Every extra link in the chain takes its own cut.

4. Read the four clauses that matter

• Conversion. Broker contracts often include a non-solicitation clause that stops you hiring the consultant directly for a period after the engagement, or a conversion fee if you do. Know the terms before you start, not when you want to make an offer.
• Notice. How quickly can you end the engagement, and how quickly can the consultant? A short notice period on their side is a risk on yours.
• IP. In Denmark, as in many EU countries, the automatic transfer of software rights covers employees, not independent contractors. Both the consultant's contract with the broker and the broker's contract with you need to assign the rights. More on that in who owns the code a freelancer writes.
• Liability. How much is the broker really liable for? Contracts often cap it at a fixed amount.

This isn't legal advice. If a lot is at stake, have a lawyer read the contract.

5. Negotiate the share, not just the rate

With several consultants or a long engagement, there's room to negotiate. Ask for a volume discount, a cap on the broker's share or a step-down that lowers it after, say, 12 months. Don't only squeeze the total rate, though. If the saving comes out of the consultant's share, you end up with a consultant who has less reason to stay. My broader advice is in the guide on how to negotiate with a developer.

6. Review the arrangement every six months

Put a date in the calendar to check whether the broker model still fits. If the consultant has become a fixture of your team after a year, a direct contract or a hire may cost less, provided the contract allows it.

Next steps

If you're a larger organization with many external contractors, a broker is often a sensible choice, as long as you know its share and have read the clauses. If you need one developer for a web app, a SaaS product or an integration, you rarely need to pay a middleman.

On my services page you can see the kinds of projects I take on and what working with me looks like. You talk to me from the first call, and the code is yours from day one.

Frequently asked questions

What's the difference between a broker and a staffing agency?+

In practice the line is blurry and the terms vary by country. A broker typically places independent contractors who invoice through their own company. A staffing agency often employs the worker and hires them out, which brings different employment rules and costs. Ask which model you're buying, because it affects liability, notice periods and who owns the work.

What's the difference between a broker and a consultancy?+

A consultancy usually employs its consultants and can take responsibility for a whole deliverable, while a broker mostly places independent contractors and sells their hours. The consultancy also handles technical leadership and quality control, and its price reflects that. If you need a finished result, a consultancy is closer to it. If you just need an extra person on your own team, a broker can be the simpler option.

What happens if the consultant leaves mid-engagement?+

The broker usually finds a replacement, which is one of the genuine benefits of the model. But a new consultant needs time to learn your system, and you typically pay for that time. Ask how quickly the broker commits to finding a successor and whether you pay for any overlap between the old and new consultant. Make sure the code and documentation live with you.

Can the consultant tell me what the broker takes?+

Possibly, but they may not be allowed to. The consultant knows their own rate and therefore the gap to yours, but their contract with the broker may include a confidentiality clause. Ask the broker directly instead. An open answer is a good sign, and a refusal tells you something about how the relationship will work.