But I'm not sure whether the company would count just an employee's salary as non-overhead costs. I'm fuzzy on the details of how overhead is usually calculated.
But he said:
> That is my billing rate to the government is 2.8 times my hourly rate as determined by my salary.
Doesn't that mean that the government pays a total of 2.8x his salary, so overhead would be 180% (+100% salary = 280% total)? Or what mistake did I make here?
And this is where it's weird, because 65%, 180%, and 280% are all valid, but different, ways of looking at it.
Because you get 35% of the money, the company gets 65%. i.e. 65% of your billable hours are overhead.
Or, the company gets 180% of what you get. Or, you could say your overhead rate is 180%.
Or, you charge the government 280% of what you get paid. Which is the effective end result.