Determining how much to charge clients for contract staffing services extends beyond a contractor’s wages. For some recruiters, setting a contract bill rate can be a challenge. There are many things to think about like the state of the market, your competition, your margin, and how much your contractor is going to be making. But once you know what goes into it, learning how to calculate the bill rate isn’t difficult. It could be even easier using an instant quote tool like FoxHire’s but we can get to that later!
In other words, pay rate is the amount of income independent professionals are actually paid (and taxed on). For the purposes of your discussion with a client, .
How to Calculate Contract Bill Rates
https://www.foxhire.com/blog/establish-bill-rates/
In other words, pay rate is the amount of income independent professionals are actually paid (and taxed on). For the purposes of your discussion with a client, .
Bill rate vs. pay rate
Unlike a bill rate, the pay rate only applies to the contract worker’s wage (hourly or weekly rate). Pay rate is how much you pay the contract worker. It does not include other costs of employing the worker like taxes and insurance, or your recruiter fees (profit).
Apply a multiplier (mark-up)
Once you have determined the hourly pay rate, you can use an average multiplier to calculate the company’s bill rate. As of May 2021, the current average multiplier is 1.56 (or 56%). Multipliers vary based on factors like location and industry.
When you decide on the mark-up, multiply it by the contract worker’s hourly pay rate to come up with the proposed bill rate.
Let’s say you want to pay a contract worker $45.00 per hour. Use the average multiplier of 1.56 to find your bill rate:
$45.00 (Hourly Pay Rate) X 1.56 (Multiplier) = $70.20 (Bill Rate)
FAQ
What is a bill rate in staffing?
What is the difference between bill rate and labor rate?
What is the difference between billable rate and actual rate?
What is a bill rate?
Bill Rate Definition: the amount a company or professional charges per hour of work. In other words, bill rate is the amount independent professionals charge clients pre-taxes, fees, and discounts. It factors into the costs you need to cover to make your target income. This rate is the foundation on which you build your business.
What is a staffing agency Bill rate?
Finally, the bill rate is the combination of the two above components. This is the full amount that you’ll ultimately end up paying for the staffing agency’s services and the contingent worker’s services. Many business owners don’t understand exactly what they’re paying for when they engage the services of a staffing agency.
What is the difference between pay rate and Bill rate?
Pay rate is the amount of money workers are paid per hour, week, etc. Bill rate is the amount a company or professional charges per hour of work. Bill rate and pay rate are easily confused, but they both factor into the decision of how much you should charge for your services as an independent contractor, consultant, freelancer, etc.
What is a pay rate?
Pay rate is how much you pay the contract worker. It does not include other costs of employing the worker like taxes and insurance, or your recruiter fees (profit). Determining your bill rate might seem intimidating, but it doesn’t have to be. First, let’s look at what makes up the hourly bill rate:
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https://www.mbopartners.com/blog/contracts-finance/bill-rate-vs-pay-rate-what-is-the-difference/
https://activitycovered.com/bill-rate-vs-pay-rate/