What the calculator does
Flexible enough for real chains.
- Up to five layers, each named and set as a percentage of the rate or a dollar amount per hour.
- Your employer’s split to the consultant, such as 80/20 or 70/30.
- Rate after each layer, share lost along the chain and dollars per hour taken.
- A work-backwards tool: the end-client rate needed for the consultant rate you want.
The formulas
Layers are applied in order, top to bottom.
- Rate after a percentage layer = rate × (1 − that percentage).
- Rate after a dollar layer = rate − that amount.
- Consultant rate = rate reaching the employer × split.
- Share lost = (client rate − consultant rate) ÷ client rate.
Worked example
The end client pays $100. A prime keeps 10%, leaving $90. A sub-vendor keeps 8%, leaving $82.80. An 80/20 split gives the consultant $66.24, so the chain and the split take $33.76 an hour, about 34%.
Why it matters to a small firm
Margins that look normal at each layer compound. Before you submit, ask how many layers sit above you and check that the rate left works for the consultant and for you.
Frequently asked questions
Are these margins typical?
No standard exists. Margins vary by client, volume and relationship. The defaults are examples to show how the math works.
How do I find out how many layers there are?
Ask the vendor who holds the contract with the end client and who you would invoice.