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I started a new job about 8 months ago as a software engineer. The company is an ecommerce shop where we basically build out Optimizely site for other companies. Since joining I've moved from a position where I'm engineering full time to now a position where I am managing devs, leading meetings about integrations, and meeting with our clients to try to set expectations and plan sprints etc. I am also only 2 years out of college with not a ton of industry experience which means I'm often working pretty late trying to learn new systems to make sure I communicate clearly.

Recently I found out my company is charging $185 an hour for my services, and I am supposed to log about 30-35 hours of that time a week. Which I consistently hit. My clients are very happy with me, dev moral is really high on my teams and we are getting much more done than when I joined the company.

Currently they are paying me 85k plus your standard benefits package and bonuses depending on the companies profit margins (which have been as high as 60% recently). I am looking for insight on how much of a raise would be reasonable to ask for as well as how I would go about talking about that with my boss. Thanks for the insight:)

EDIT: Not trying to make this about how much they charge vs how much I make. I just have no clue how to figure out what someone doing similar to me should be making.

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  • What they charge for you should not effect what you get paid. If you feel you are underpaid for what you think you are worth then ask for what you think is fair. But avoid mentioning what they make from you. There are lots of other costs other than your salary that the $185/h needs to cover. Don't make the mistake of thinking you are owed a share of it (which to be fair, you already seem to be getting in bonuses anyway).
    – musefan
    Commented Mar 4, 2022 at 16:03
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    Does this answer your question? How should I properly approach my boss if I'm feeling underpaid?
    – gnat
    Commented Mar 4, 2022 at 16:09
  • @gnat Yes! That's a great start. Im having a hard time defining and finding what other people are making in similar roles. Commented Mar 4, 2022 at 16:26

3 Answers 3

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What your company charges their client for your services, is in no way related to your pay. Don't try to make that argument as it will likely fall on deaf ears.

What determines your pay, or what SHOULD determine your pay, is what you are worth to the company. The market determines that in most places and your best course of action is to do your research into salary surveys, job postings for similar jobs in your area. Also things like how much it might cost to replace you should factor into your compensation.

Once you have some facts and figures, create a business justification as to why you should be compensated more than you are now. Don't focus on things like how hard you work or how many hours you put in or how long you have been there. Those things don't matter at all. What matters are RESULTS and especially results that positively impact the company's profit. Figure out how your good work drives the bottom line. The better that looks the better your case for a raise.

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  • Thanks! That's helpful information. Ill start working on putting together information about what value Ive added to the company. Commented Mar 4, 2022 at 16:12
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I disagree with those saying what you are charged out at has no relevance to what you should be paid. Sure you shouldn't get 100% of the rate as it reflects everything else the company is doing to make you worth that rate to the client (support, sales, admin etc) but generally the more they charge you at the more valuable you are. For example if there are 4 team members all being paid $85,000 per annum and the other 3 are charged out at $120 per hour you have a strong argument that your compensation should be nearer $120,000 per annum. It will never be a direct "charged out at 150% = salary at 150%" but what they charging you at reflects the value you are bringing to the client and you're due your fair share!

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As others have stated, what your company charges their clients for your work isn't, and shouldn't be, a marker for how much they pay you to perform that work. Making that argument isn't going to get you very far.

Make your argument for a raise based on your skills, experience, responsibilities, and your worth to the company.

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    I guess my argument is more that they hired me as a software engineer, but have escalated me to a position managing engineers and planning projects for them for the same pay as I was making before. Commented Mar 4, 2022 at 16:18

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