In practice
The bill rate covers the consultant’s pay, employer costs and the firm’s margin. For a W2 consultant the firm pays taxes and benefits out of the difference.
Bill rates are usually quoted per hour and agreed before submission.
How it shows up
A bill rate of $85 an hour with a pay rate of $65 leaves $20 an hour before any employer costs.
How a staffing team uses it
Use the markup and margin calculator to find the lowest bill rate that gives you your target margin, then compare it with the rate the requirement supports.
Common mistakes
- Quoting without knowing your cost.
- Confusing bill rate with pay rate.
- Forgetting that the rate may be lower after other vendors take a share.
Frequently asked questions
Is bill rate the same as client rate?
Not always. The end client may pay more than your bill rate if other vendors are in the chain.