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On Fri, Jan 9, 2015 at 10:19 AM, Shawn <shawn -at- cohodata -dot- com> wrote:
> Or... maybe it is different in the U.S.? In Canada, agencies typically make
> around 45% of what the contractor is paid. The most outrageous agency fees
> was during my first contract job where the agency took 68%. I was shocked
> when my manager told me what they were really paying for my services!
In Canada, agency rates can vary based on the relationship of the
contractor to the agency.
If the contractor is considered an employee, then the agency tends to do as
you described, billing the client an additional 30 to 45% of the hourly
rate paid to you. Plus the agency deducts Employment Insurance, Canadian
Pension, and 4% Vacation reserve. If you're a regular agency "employee"
contracted to one or more clients on a continual basis, you can get paid
your 4% Vacation.
If the contractor is considered a sole-proprietor, then the agency tends to
bill the client an additional $5 to 10 to your hourly rate for
administrative overhead, which includes insurance.
If the contractor is incorporated, and carries an independent E&O insurance
policy (I think the current requirement is $2 Million liability), then the
agency tends to bill $2 to manage payroll.
I am not sure, however, if the contractor status changes whether you get
paid a flat rate if you work above 40 hours per week. All I know is as an
employee, working 5 additional hours a week to bank money for an upcoming
vacation billed my boss time and a half. That never happened again.
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