Employee billing rates are based on?



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    Samineh Mirian (Edited )

    Hi Yasmin, 

    They are both correct. The most important point to take away is that the employee billing rate is not equal to employee salary or "Direct Labor".

    Hourly rate x Net Multiplier x Profit = Minimum Billing rate. The net multiplier can include all the items that both sources have mentioned such as office overhead, profit allowance, any kind of insurance, tax and any indirect cost! 

    I would suggest reading Profit Planning in AHPP (page 438)! 

    Good Luck,


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    Yasmin Fathi

    Thank you so much!

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