In practice
For W2 consultants the pay rate is wages and the firm also pays employer taxes and benefits. For C2C consultants the pay rate is the amount paid to the consultant’s company, which covers its own costs.
The pay rate is a major part of the firm’s cost, so it is set before the bill rate is quoted.
How it shows up
A consultant who asks for $65 an hour C2C expects that amount before the consultant’s own overhead and taxes.
How a staffing team uses it
Agree on the pay rate in writing before you submit, and state whether it is C2C or W2.
Common mistakes
- Not stating C2C or W2 when quoting.
- Assuming a W2 rate and a C2C rate are interchangeable.
- Changing the pay rate after submission.
Frequently asked questions
Why is a C2C pay rate higher than a W2 rate?
The C2C company pays its own taxes, insurance and benefits, so the rate is higher to cover them.