islandlove Posted February 22, 2006 Share Posted February 22, 2006 Hello, can anyone shed some light on the difference between one's billable rate and one's salary? my billable rate was increase recently. and i did get a slight increase in my salary. i recently calculated what i bring in for the company vs what i get in my salary. i get about a third and the company gets the other two thirds. i know i'm to make them money but just wondering if i'm getting the raw end of the deal or is this typical? thank you. Link to post Share on other sites
933KJL Posted February 22, 2006 Share Posted February 22, 2006 It all depends on what you do and your industry. For the US, a typical benefit package (whatever that is) including unemployment insurance, workers comp, some sort of health coverage, tax burden, etc to a company adds 25% to 30% to the employees salary. So if you are making $100K the actuall cost to the company is probably closer to $130K. Now, you need to figure in overhead and so forth--are you an intellectuall company with a few PCs and a basic office, or do you lease specialized equipment and such? In my company, I pay my sales people commission only and they earn 40% of income to the company (which would equal your billable rate) and that was considered generous I hear. Now, I have a reasonable overhead and nothign specialized and no heavy leases or other long term obligations. Hopefully this makes some sense. Link to post Share on other sites
Author islandlove Posted February 22, 2006 Author Share Posted February 22, 2006 thank you for the insight. that makes me feel better. we are an IT company so there is equipment and such and plus the lease. i forgot about all the other overhead stuff you mentioned. Link to post Share on other sites
alphamale Posted February 22, 2006 Share Posted February 22, 2006 you deal is pretty standard ISLANDLOVE. If you are a full-time permanent employee you'll generally get about a third of what they bill you out at. If you are a independt contractor you generally get about half what they bill you out at: Full time: Bill rate = $150/hr then salary = $50/hr ($100K/yr) Contractor: Bill rate = $150/hr then your cut = $75/hr (150K/yr) Link to post Share on other sites
Author islandlove Posted February 22, 2006 Author Share Posted February 22, 2006 thank you - glad i'm not the only one helping the rich get richer as the rest of us just keep getting by! Link to post Share on other sites
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