How to start a staffing agency: setup, employer taxes and timesheet software

Step 1: register the staffing agency by the SBA's steps

To start a staffing agency in the US, register the business by the SBA's eight launch steps, read the IRS employment tax rules before anyone goes on your payroll, then set up timesheets and invoices before the first contractor starts. This is not legal or tax advice.

The SBA launch guide lists these steps in order:

1. Pick a business location.
2. Choose a business structure.
3. Choose a business name.
4. Register the business.
5. Get federal and state tax ID numbers.
6. Apply for licenses and permits.
7. Open a business bank account.
8. Get business insurance.

The SBA says an EIN is free to apply for and warns against sites that charge a fee for one. It says licenses and permits vary by business activity, location and government rules, and that state tax obligations differ, so check your state's websites. Zoning can still apply to a home-based business. For a permanent-placement desk, see how to start a recruitment agency.

Step 2: read the IRS employment tax rules

The IRS employment taxes page explains the taxes an employer must deposit and report. It says you must deposit and report federal income tax and Additional Medicare Tax withheld, plus the employer and employee social security and Medicare taxes, and do both on time. Employment tax returns can be e-filed.

The same page sends self-employed people to a separate IRS tax center. The SBA says business counselors, attorneys and accountants can help with the choice of business structure. This guide gives no advice on worker status.

Step 3: set up timesheets, approvals and invoices

A contract staffing desk needs timesheets, client approvals and invoices. Software for that is an applicant tracking system (ATS) with timesheets built in. In Recruit CRM, only the Account Owner can switch the Timesheets module on, and timesheets can be enabled only on Contract and Contract-to-Permanent jobs. Per contractor you set the submission frequency, an approver, a pay rate and a bill rate.

Each timesheet moves from Open to Submitted to Approved or Rejected. Contractors submit through a contractor portal, and clients approve through a client portal. Invoices can be created only from approved timesheets and are sent from the product.

Recruit CRM turns approved contractor timesheets into client invoices on every plan, at 100 credits per active contractor a month for the first 15 contractors, and each tier's rate applies only to the contractors inside it. Best ATS for staffing agencies sets it beside other systems.

Step 4: keep payroll outside the ATS

Recruit CRM is not a payroll system. Its Bill & Pay page says it focuses on contractor pay calculation and client billing based on timesheets, so payroll runs with a separate provider. Bullhorn sells timesheets and invoicing as a separate product, Middle Office, next to its recruiting plans.

Ask about accounting links. Recruit CRM's Bill & Pay page lists accounting integrations as coming soon, while its FAQ on the same page names QuickBooks and Xero.

Step 5: price the system per recruiter and per contractor

The price has two parts: seats and timesheet credits. As read on October 27, 2026, Recruit CRM Pro is $95 per user per month billed annually, charged up front for the year, or $109 billed monthly. Business is $135 billed annually or $159 billed monthly. A seat is one named login for one person.

Timesheet credits come from the account's pooled credits, whose included share expires each billing cycle. Pro includes 100 credits per seat a month and Business 200, and no page prints a price per credit. Credit billing applies to timesheet periods that start on or after October 1, 2026. A desk that places only permanent candidates can skip Steps 3 and 4. See recruitment agency software cost for seat prices and the yearly bill.

Before any contractor is billed, a desk can try Recruit CRM: the pricing FAQ promises a 30-day free trial, and the help center ends it sooner if a usage cap is reached first; the free trial guide lists the caps.