Billable rate multipliers
Billable rate multipliers
(OP)
How do you access what a certain employee's billable rate should be? I have often heard that it depends largely on the company's overheard ratio. However, do smaller outfits even bother with figuring overhead ratios or it based off an industry norm?
I am wondering what the standard practice is. Can anyone shed light on the issue?
I am wondering what the standard practice is. Can anyone shed light on the issue?





RE: Billable rate multipliers
Mike McCann
MMC Engineering
RE: Billable rate multipliers
> effective cost of allocated floor/office/lab space
> depreciation of equipment
> allocated services, admins, security, janitorial
> utilities, etc.
> benefits
> administrative costs, functional managers, business development, sales, etc.
> cost of money --> cash flow; you pay your employee every week or two, but bill at a different time, so you're borrowing money to do that
TTFN
FAQ731-376: Eng-Tips.com Forum Policies
RE: Billable rate multipliers
RE: Billable rate multipliers
- Steve
RE: Billable rate multipliers
But the cost of the equipment and software required has gone up so I think it may even out.
RE: Billable rate multipliers
RE: Billable rate multipliers
TTFN
FAQ731-376: Eng-Tips.com Forum Policies
RE: Billable rate multipliers
RE: Billable rate multipliers
Is your base cost the raw salary, or is it "payroll burden"- the total cost of having that person on the payroll? Very different multipliers depending on which you choose, and on where you are located...
Payroll "taxes" and benefit costs are different from country to country. For instance, in Canada our primary healthcare is paid for out of the taxes employees pay on their own income, whereas in the US the healthcare cost is paid primarily as an insurance premium by the employer. In one case, healthcare is included in the "salary", whereas in the other healthcare becomes additional payroll burden.
Similarly with overheads. If your firm charges for photocopies on a per page basis, then photocopiers become a profit centre rather than an overhead. Don't charge for photocopies etc.? That cost becomes an "overhead".