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Overhead Descriptions

Synesis works on the basis of full disclosure of overhead and markup. For this to be effective, the contract worker must understand all the costs directly associated with the placement. The following provides an estimate only.

If you are paid $50 per hour, the company has expenses in direct proportion to that rate such as payroll taxes. Add these overhead expenses plus fixed profit and you obtain the billing rate that the customer must pay for your contract labor services.

Typical Company Overhead:

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FICA - Social Security and Medicare

FUTA - Federal Unemployment Tax

State Unemployment Tax

State Disability Insurance

Workers' Compensation Insurance

General Liability Insurance

Professional Liability Insurance

Accounting Fees

Legal Fees

Cost of Initial Placement

An Example:

$50.00	Desired pay rate
$ 3.10	Social Security (6.2%)
$ 0.73	Medicare (1.45%)
$ 0.43	Federal Unemployment (6.2% over 1000 hours)
$ 0.00	State Unemployment
$ 0.22	Worker's Compensation Insurance
$ 0.05	Liability Insurance
$ 0.10	Accounting Fees
$ 0.10	Legal Fees
$ 2.00	Cost of Initial Placement
$ 7.00	Fixed Markup (14% with a $5/hr minimum)
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$63.73	Billing Rate to negotiate

Fixed Markup

The fixed markup of 14% with a $5 per hour minimum on top of the overhead is not all profit! There are numerous expenses related to running the company that are not directly attributable to an individual on an hourly basis. Primarily, our referral structure comes out of our fixed markup, not from an explicit enumeration in the overhead. There are equipment expenses, office expenses, salaries for employees who are not contractors (who work to keep Synesis running), etc.