Re: More annoying requests for advice

["Gene Kim-Eng" <techwr -at- genek -dot- com>]

I think it varies by region.  In CA, particularly in
Silicon Valley, the markup on W2 contractors 
who are considered "high rate" vs clerical is 
closer to 1:1 (that is, agency charges client 2X 
what the person is paid).  Markup includes the 
agency covering the employer half of Social 
Security and paying all state UI, disability,
workmens' comp, payroll taxes and other 
government-mandated costs.  If your client is 
requiring you to document that you have 
equivalent coverage for the above you should 
be able to bill at the same 2X-3X an agency 
would charge; if not, the client is going to expect 
that you carrying your own contract will save 
them something compared to what they would 
pay an agency to ensure that all state-mandated 
i's and t's have been dotted and crossed.

Billing by hour or by fixed-price depends on 
how predictable the client's development process
is.  If they operate like a well-oiled machine and
can deal with your contract specifying a fixed
number of reviews and updates with extra fees
for each and every change they need, fixed
price may be the way to go.  If they bounce off
walls and expect you to turn on a dime with every
new bounce, then it should be by the hour.

Gene Kim-Eng


----- Original Message ----- 
From: "Keith Hood" <klhra -at- yahoo -dot- com>
> If I understand it correctly, it's common practice
> that a contractor's pay is about 1/3 what the client
> company pays the contracting company. Does that sound
> correct?

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