RE: Re Fair Cut

Subject: RE: Re Fair Cut
From: "Wally Glassett" <wallyg99 -at- home -dot- net>
To: "Dick Margulis" <margulis -at- mail -dot- fiam -dot- net>, "TECHWR-L" <techwr-l -at- lists -dot- raycomm -dot- com>
Date: Thu, 29 Jun 2000 15:40:39 -0700

Absolute nonesense. For a 1099 contractor the agency keeps 100% of their
"cut" or margin. In the example given, $50/hr to the contractor and $25 to
the agency, over a 6 month, 1000 hour contract that is $25,000 to the agency
who, after finding and placing you, normally does very little beyond
processing timesheets and invoices two times a month and sending the
contractors 1099 information to the IRS once a year. That is a lot of agency
income for not much work.

If you are a W-2 contractor then FICA, income tax and other withholdings are
taken out of the contractors $50/hour. The agency does pay other taxes, but
certainly not all of them. Many agencies offer benefits to W-2 contractors,
but they are not what anyone would call competitive benefits like those of
many employees.

Wally Glassett
Tech Doc-It, Inc.
wallyg99 -at- home -dot- net

Stephen -dot- MacDonald -at- Aspect -dot- com wrote:
>Well whaddya know, I find myself agreeing with Andrew Plato. "Fair cut"
>no meaning here because the agency is not getting a cut of your money.
>a company pays an agency $75 an hour and you get $50 of it, the client
>company is paying for two things: $50 for what you produce as a tech writer
>and $25 for the agency's work for finding you. It's as simple as that.

Well, not entirely. Part of that $25--a significant part--covers the
employer contribution to FICA, unemployment insurance, worker's comp, and
any benefits the contracting agency provides to the worker. Then there is
the agency's rent, payroll, and other overhead. I'm sure that an agency can
make good money, but please don't mistake the agency's "cut" for margin or
their margin for profit.

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