What is the mark-up on consultant rates?

Free Agent Source applies an 80% – 20% split to client billable revenue, where consultants earn 80% of revenue and Free Agent Source earns 20% to cover operations and employer costs. The cost of most traditional employment relationships is 25% – 45% of an employee’s salary. These additional costs for traditional employees include paid personal time off (vacation), paid holidays, paid volunteer days, other employee benefits, training. Over the long term, the cost of an external consultant is about the same as the cost of an employee.  Usually, the difference in cost of a consultant compared to an internal employee of equivalent skill and experience, is related to recruiting. The cost of recruiting can be managed when it is visible and un-bundled from the consultant’s on-going billable rate.