> my agency is likely billing out at $80/hour or more, yet I only get $55/hour
Wait, what? Where are you? Please tell me you're a regular employee of the agency on paper, getting benefits and not paying self-employment tax?
Wait, what? Where are you? Please tell me you're a regular employee of the agency on paper, getting benefits and not paying self-employment tax?
Juniors on the other hand get pretty exploited in the name of "earning their stripes" - I've seen a few accounts over the years of billing at $80-150/hr and the employees getting $15-25/hr..
I think the local average for recruiters and agencies (usually one and the same here) is 15% of first-year wage for FT placements, or $30/hr margin for contract work.
If jetblackio is in California, he's getting ripped off (doubly so if he's a 1099 and/or pays any substantial amount for his health plan). If he's in Wisconsin or Canada, he's probably doing OK. If he's in a country that doesn't use a currency called "dollars" but he's incorrectly using the dollar sign anyway, that throws everything completely out of whack.
This is why I asked where he is.
I'm in Colorado and I do not get any benefits. The company I'm contracted to only works with this recruitment agency, so to get hired at all, I had to go through them. The agency obviously takes a cut, and from what I've gathered from some of the employees, the agency is taking around $80+/hour while my bill rate is $55/hour.
As I stated, there are no benefits, I pay my self-employment tax and have to cover my own medical expenses. There is no paid time off, holidays or otherwise.
I'm not sure if this is considered normal or not. But I don't really like the situation and have been working towards permanent employment with the company.
As a side note, this is a great company to work for, and employees have great benefits. But it does sound like contractors may be getting shafted.
FTE software engineers in Denver should be $80k minimum.
4 weeks vacation/sick time + 10 paid holidays, $80,000 + $9,230 = $89,230
Medical, $89,230 + $3600 = $92,830
Self-employment tax, $92,830 * 1.0765 = $99,931
That by itself calls for almost $50/hour. Add vision/dental, retirement plan, and whatever else regular employees get, plus the fact that you spend more time on your taxes, and do it throughout the year (you're remembering to pay quarterly estimated tax, right?).
Now, where's your risk compensation? The company is hiring contractors because they're easily disposable. You could be dropped at any moment.
Where's the compensation for the value of the flexibility you're providing the company?
Contracting as a 1099 calls for a 2x multiplier over nominal FTE rates. At least. You should be getting $80+/hour just for breathing.
And would you really only be worth an $80,000 salary? Just how junior are you?
You're right on the risk compensation, though this company is known for hiring contractors for long periods of time (some contractors here have been here longer than 5 years). So though it is a very real risk, I'm not as worried about it as I would be otherwise.