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> No it does mean the overhead is 280% if defined the same way as the university (overhead is calculated as percentage of non-overhead costs, not overall costs)
by OMGWTF 5y ago
> No it does mean the overhead is 280% if defined the same way as the university (overhead is calculated as percentage of non-overhead costs, not overall costs).
But he said:
> That is my billing rate to the government is 2.8 times my hourly rate as determined by my salary.
Doesn't that mean that the government pays a total of 2.8x his salary, so overhead would be 180% (+100% salary = 280% total)? Or what mistake did I make here?
- michaelrpeskin 5y agoYeah, I don't know exactly what is called "overhead" if it's the full 2.8 or 1.8 above my costs. All I know is the accountants told me to write down 2.8 and that the bill that we send the government is 2.8x what I make "hourly" for the hours work on that contract.
- bena 5y agoYeah. So for every hour you bill, about 35 cents of every dollar goes to you and 65 goes to the company. And this is where it's weird, because 65%, 180%, and 280% are all valid, but different, ways of looking at it. Because you get 35% of the money, the company gets 65%. i.e. 65% of your billable hours are overhead. Or, the company gets 180% of what you get. Or, you could say your overhead rate is 180%. Or, you charge the government 280% of what you get paid. Which is the effective end result.