does a temporary worker count towards my company's headcount

Temporary agency workers are usually counted in the headcount

When determining the number of employees, the general approach is to look at the people who actually work for the company, not just those on the payroll. A temporary agency worker who works regularly in the company typically counts in practice, even though they are formally on the temporary agency's payroll. This is relevant because the number of employees partly determines whether a company falls under the reporting obligation of the sustainability reporting directive, and also whether a supplier qualifies as the type of SME for which the chain provision of March 2026 sets a limit on what a major buyer may ask.

This distinction is not merely a matter of definitions; it also has a practical side. When filling in a file for a questionnaire, you are often asked for the number of employees as basic information, and also for the type of employment contract for the social indicators within the VSME basic module. Counting a temporary agency worker in the number of employees is then different from including a temporary agency worker in the personnel data that appear in the payroll — the latter comes via the temporary agency, not through the company's own payroll. If you are uncertain whether this is relevant to your situation because the question is right on the threshold of a cut-off value, you can look at Does this apply to my situation? how such borderline cases are generally approached.

Where this follows from the directive and the VSME standard

The sustainability reporting directive (CSRD, Directive (EU) 2022/2464) uses the number of employees as one of the criteria to determine whether an undertaking falls under the reporting obligation, and the VSME basic module of EFRAG also asks for the workforce as part of the basic data on the undertaking. Both sources are based on the actual workforce working for the undertaking, which is why temporary agency workers are usually included. For those who want to know exactly what other information the VSME standard asks for, what is VSME and what does it have to do with me provides an overview of the basic module.