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As you know, IT recruiting firms provide client companies with skilled contractors on an hourly rate which is also called the billing rate. The recruiter takes a "small" percentage of this rate and gives the rest to the contractor.

I was wondering if I should ask someone what my billing rate is ? My questions are:

  1. Who should I ask, the manager at the client or the recruiting firm itself ?
  2. When should one ask them the billing rate ? (Eg. During late stages of interview, after probation on job, after 2-3 weeks on job etc.)
  3. How do I politely request for some document which shows my billing rate instead of just verbal figures (which could be a lie) ?

The aim behind asking these questions is not just curiosity, but also to get an idea on how to negotiate a raise in rates ONLY after I have demonstrated value to the client ?

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  • Why do you care? The only important thing is what they pay you. – tcrosley Jun 23 '14 at 2:34
  • @tcrosley - because I quoted a bit lower to get the job asap. I'd rather get experience than sit "idle". I get the feeling that the recruiter must be making a lot from me because they did not even try to negotiate with me. Other than that, I am just curious. – sid smith Jun 23 '14 at 2:55
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I don't even go on interviews until I know what the rate of pay to me is and that the position is worth my time. Your recruiter already knows what the rate is.

You should never ask the client what the billing rate is. Your employer is the contracting firm and the rate they bill the client at is really not your business, and even asking the client that question is extremely unprofessional. If you are 1099 to the firm then the consulting firm will tell you the rate you bill them at. This is of course negotiable but really only before the contract begins or at time of renewal. And really at renewal they are not likely to provide you with more than a small percentage raise. So the time to negotiate is before you start the contract.

At the time of the official offer you should be able to get an offer letter which has either your rate of pay(if you are W-2) or your billing rate(if you are 1099). But this is only going to happen when you get an official offer. The initial figure could go up or down prior to the official offer depending on how you interview and the clients willingness to pay for you.

Based on comments it does seem that you want to know what the consulting firm is billing the client for your time. This is a business secret and not something you are likely to find out. The client may even be contractually obligated to keep that rate confidential. By making that number public it could result in the loss of a competitive advantage for your employer. That said you can probably assume that they bill at about twice what you are paid. Out of that they need to pay your salary and benefits, as well as pay of the overhead of running the business. The company knows what having you on site costs them, and what they need to break even so its possible that the rate is higher or lower. But no business is in business to lose money. They are likely making a profit off of you or there would be no point in having the contract in the first place.

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  • I already knew my rate. I need to know the rate my the recruiter gets. If they make $100/hr off me & give me only $65/hr as per my quote, then I know that I can ask them for much more, say $80. This was a contrived example. Even if they make $20/hr off me, they are still making a lot of money. They probably don't spend more than $8/hr on my insurance, hr costs & such. So, that leaves them with $12/hr. 40*4*12 = $1920 per month. That is a lot, considering the fact that they are just collecting cash. No wonder people want to open recruiting firms and there are so many. – sid smith Jun 23 '14 at 3:03
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    @sidsmith all I can say is, if you're so confident that it's so easy to find clients, then don't go through a recruiting firm. Deal with clients directly. I think you'll soon find that there's a lot more to it than "just collecting cash". – Carson63000 Jun 23 '14 at 4:44
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    @sidsmith - You are wrong about the costs of employment. For ever dollar you put into Social Security your employer puts one in too. Your employer also has other costs for having you employed like liability insurance in case you do something that they are ultimately liable for. They also have the over head of running the business that must be covered by the fees, that is what allows them to bid on jobs that get you a pay check, and what allows them to give you that pay check. – IDrinkandIKnowThings Jun 23 '14 at 13:20
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    But regardless, billing rates are pretty confidential because if their competitors know what they charge then they can easily under bid them... just like you are wanting to do. But I highlighted the part of my answer that pertains to what you want to know. – IDrinkandIKnowThings Jun 23 '14 at 13:22
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    @sidsmith well it's quite simple. If you want to "go it alone".. how do you find a client that has need of your services? If you have the contacts and the network, you can do this. And if you already have established a reputation as a contractor, you'll have clients contacting you looking to get work done. But getting to that point is the tough part. – Carson63000 Jun 24 '14 at 4:48
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You may find out your billing rate by accident (a manager tells you - this has actually happened to me before.) You may be able to ask the recruiting firm, but likely they won't tell you - because they don't want that to become common knowledge.

Definitely do NOT ask anyone at the client site, ever. It's very unprofessional, and while some individual managers don't mind discussing these things, their own higher-ups may discourage it. Corporate HR certainly will.

Any raise in your hourly compensation would have to be discussed with the agency first - they're your employer, and they also have the ability to decide to pay you more without billing the client more. You can, if you have a good relationship with your on-site manager, mention that you've learned a lot, you're contributing a lot, you really enjoy this aspect of your role, and you're looking to talk to your agency about a change in the rate they pay you because you're doing a significant amount more than the job description. (This can be tricky, though, so if you don't have an excellent relationship with the onsite people, don't do it.) Your aim in getting a higher hourly rate for you would be for the agency to increase the hourly amount they pay you WITHOUT billing the company more, unless there's strong justifiable cause (ie, you were hired as a junior developer and after a year you're a team lead, you're mentoring others as they join the group, and you're doing the dev work.)

EDIT TO ADD: if you find a job, and then go to a recruiting firm to have them essentially do all the payroll/paperwork (ie, they don't have to spend any time learning about you, recruiting you, finding a job match for you) many agencies will often take a lower markup on that job. This can mean that you get more takehome pay, or that you end up costing your employer less, or something halfway between the two...it varies, as does how much less of a markup the agency would request. But this would require you doing all the work: networking with the hiring managers, finding a job that you want that also wants you in the role, agreeing on a job description and scope.

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