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  1. #1

    toMACsh's Avatar
    Member Since
    Jul 30, 2009
    Mac Mini (Late 2014) 2.6GHz Intel Core i5 Memory: 8GB 1600MHz DDR3
    billing to wage ratio
    How does one find out whether there are "standard rates" for the difference between what an employee is paid and what the employer charges the client? I have searched terms such as "billing rate" "charge rate" and others, and I'm coming up empty. (Unless I want to pay hundreds of dollars to hire a consultant for advice!)

    In other words, if your time is billed out, does your boss charge the client 2 times what you're paid, three times, etc. ? I know it will vary, but there should be some sort of guideline for good competitive business practices. I'm particularly interested in the architecture and engineering fields.

    I have a ratio in mind from my business courses in college, and my prior work experiences. I just want to know what a reasonable, fair ratio is these days. Anyone have a good source?

  2. #2
    As far as I can tell, there's no real guideline -- it all depends on what the local market will bear.

    When I worked as a temp, my hourly rate was "marked up" 33 to 50 percent by the agency -- so as an example I would get paid $10/hour by the agency but the client was billed $15/hour.

    Different professions definitely vary in this. When I did tech support (actually I still do tech support but I mean on an on-call basis), it was 100% markup.

    What you really need is a source for finding out the average wages for people in your profession in your city. Wolfram Alpha would probably a good place to try your query, they seem to excel at stuff like that.

  3. #3

    harryb2448's Avatar
    Member Since
    Nov 28, 2007
    Nambucca Heads Australia
    iMac, i7 4GHz, 32GB memory, 1TB Blade Drive, OS X.13.4
    One hundred per cent is pretty normal if you are employing technicians/tradesmen. This allows for those slow occasions when their time cannot be billed to a client

  4. #4

    Kash's Avatar
    Member Since
    Dec 03, 2006
    Irvine, CA
    Black Macbook C2D 2GHz 3GB RAM 250GB HD iPhone 4 iPad 3G
    Like chas said, it really depends on the profession. When I was interviewing with this law firm, he told me that they pay law clerks $15 to $20 an hour while billing them out at around $100. That's a 500% markup!

    June 2007
    July 2009

  5. #5

    TattooedMac's Avatar
    Member Since
    May 19, 2009
    Waiting for a mate . . .
    21" iMac 2.9Ghz 16GB RAM - 10.11.3, iPhone6s & iPad Air 2 - iOS 9.2.1, ATV 4Th Gen tvOS, ATV3
    I know in the Profession i am in. i would get paid $29.80 a hour and the agency would be charging my prospective employer $57.45 ....

    So thats nearly100%markup. As above had said, i think it will depend on season, type of profession and location .....

    Location is a HUGE factor here in Australia. In NSW i was working for $29.80 hr and waaay down in Tas doing exact same job i was earning close to $11 less ....

    My 0.02
    Dont forget to use the Reputation System if someone has helped you out !!!
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  6. #6

    toMACsh's Avatar
    Member Since
    Jul 30, 2009
    Mac Mini (Late 2014) 2.6GHz Intel Core i5 Memory: 8GB 1600MHz DDR3
    Thanks to all. I know it depends on the profession, which is why I specified that in my post. And I know it's not a mandate. It's what the market will bear, which is why it is dependent on what market you're in.

    In business school, they probably gave us an "average" which was 2.5 times the pay rate. That's the rate one former employer of mine used. The economy is such a drag on wages, that some employers are gouging clients and under-paying employees. There's an article(column) about that in Newsweek's current issue.

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