What percentage of the rate you are billed out to client should your salary be?

I work for a EPC firm and just wanted get a feel or see if there may be a industry standard/norm for what percentage you should get out of the rate you are billed out to clients.

It may vary too much to get good figure but TIA.

You'd probably be lucky to get 1/3

30% for a former employer of mine

In my line of work (specialized IT), clients pay about $2500/day for my services. When I was doing that, I was making between $85-$135K/yr. So, the ratio you're looking at is between 13% to 21%.

In the case of a 6-month contract, the customer paid about $135/hr and I got paid about $65/hr so that was about 48%. But it was probably a unique situation.

30% is industry avg. but for higher level guys that percentage increases and lower level guys that percentage decreases.

I make roughly 23% of my bill rate as salary. That number goes up to about 29% if yearly bonus is included.

Salary is about 27%. With bonus, it gets to about 32%.

21% Salary, 25% Bonus

It definitely depends on firm size and amount of oversight over your work.

I guess i am in-line with everyone else. I am a little over 30%. I have received a couple of bump ups in title and pay recently. I now bill at 30 dollars more an hour but only see 10 per hour of that. Thought i should see more of that but it seems pretty standard.

Hollywood: would you mind sending me an email at (texags username) at gmail dot com? I have a few questions for you regarding your career if you don't mind.

Buddy of mine makes about 70k/year and is billed out at around $550/hour.

My guess is he has some specialized equipment with him.

I am at 34%... based on 2,000 hour year. I work a lot more than that.
Government contracts have criteria in them that regulate/set a base line for most fields.

[This message has been edited by BBDP (edited 2/28/2012 9:30a).]

About 50%.

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About 50%.

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Your company is probably taking a loss on you then or just breaking even. Depending on benefits and overhead costs, 1.5 to 2x bare wage rate is generally break even for companies.

Based on 65% utilization target I'm at 36% plus bonus. Obviously lower if you factor in non-billable time.

Other roles bill close to the same and earn much less, depending on job and location.

[This message has been edited by ORAggieFan (edited 2/28/2012 10:05a).]

Yep...the profit is in the peons!

100% billable (actually more if you factor in offshore time) for the past 2 years so they're doing OK.

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Buddy of mine makes about 70k/year and is billed out at around $550/hour

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WHAT???

Where does this guy work? That is hugely underpaid.

There is something missing in the story. There are not many people willing to pay $500+ / hour for someone who can only demand $70K in salary.

[This message has been edited by AeroAg2003 (edited 2/28/2012 12:58p).]

IT- Professional services. 21%, sucks.

The $500/hr for the 70k guy has to include specialized equipment or a lot of travel costs or something else other than just the guy.

I would guess that's a standard billing rate. Lots of firms have standard billing rates that are much higher than what they're actually able to charge.

I think what no handlebars said is the case, he doesn't use any sort of specialized equipment.

Then he's not billing out at $500.

Lot's of firms love having astronomical rack rates that they then go and discount 50+% to make their clients think they are getting a deal.

At my last consulting gig I billed out at $455/hr and my all in compensation was probably right at $100-105k after the various bonuses. So I was around 10-12%. I typically only billed about 800-1200 hours/year though. Also, my employer typically discounted my rate or took an engagement on a fixed fee basis which didn't allow them to take full advantage of my rate. So my employer probably made about 65-75% on me (right in that 30% ballpark).

When I was consulting, we would shoot for a 3x multiplier (3 x our hourly rate). Would settle for less depending on the amount of work.

thats pretty close to what we shoot for as well. we aim for at least a 3.2X but have on occasion taken less. We don't typically go after work unless we can make that.

~15%

I bill $225/hr and get to keep 85-90% depending on the client

IT market is a bit leaner on markup. Our contractors keep at least 50% to 70%. The higher level contractors get even more. We pay benefits on top of that as well. Even on our benched Professional Services where we pay for non-billable hours its well above what y'all have listed.

[This message has been edited by Swede (edited 3/2/2012 10:05a).]

close to 40% of billout - commercial real estate appraiser