[thuh Freak]

Buddy of mine found this great job at a big financial company. He and me used to work together. So we's talking over some brews and jays, and he tells me he wants to bring me over to his group at his new job, to help out as an IT guy/programmer. cut to a few weeks later... his boss is in a pickle, because they've hired too many people, and are only authorized to pick up consultants for the remainder of the year. so my buddy floats some hourly rates my way. i've dealt with consultants before, but i aint ne'er been involved with the pricing of consultants. nice even numbers like 100/h, 150/h, etc. if you annualize 100/h (x ~40h/wk x 50wk/y), thats $200,000/y (before tax). (whoa) trick is, they tell me, is they can't give me that rate as an independent, only through some preferred consulting firm; and a firm will cut off tax (duh), and 401k and their own chunk. but after a bit of back and forth, the question stands before me of how much do I want to make. of course, i don't have that much leeway, but i got some questions for youse.

First question for the audience, how much of a cut off do consult firms tend to take? IT ones in particular. Second, how much do people typically charge as a premium for consulting (compared to their regular salaries)? Anything else I should be looking into wrt this money game?

[spotcatbug]

My last job was an IS/IT position at GE, working through a contracting company. Basically, GE contracts this other company to give them IS/IT workers. Why? So that GE can book the cost differently, not as wages. GE pays the contracting company lump sums of money and the contracting company's employees work at GE on whatever GE wants. You feel completely like you're a GE employee except the benefits don't match real GE employee benefits and your ID badge says "CONTRACTOR" on it.

Anyway, during my (short) time there, I managed to find out what GE was paying the contracting company for an hour of my time vs. what I was getting for an hour of my time. My gross pay was 64% of what GE paid to the contracting company. The contracting company got the other 36%, naturally, but with that they paid the employee matched FICA and Medicare, which would come to around 10% of the 64%. So, I guess 30% is what they got to keep.