I realise this could be a 'how long is a piece of string' or 'apples and oranges' question but wondering what people's thoughts are on this. I know often award rates are the main way of defining pay amounts. But, for example, if an employee wanted to justify a pay raise, what do you think is the cut of income that should go to the employee? I have seen it ranging from 25%, 33%, to close to 100%. I'm interested in what others have observed in their own work experience. Hope that makes sense. Thanks.
What Is The Typical Percentage That an Employer Will Pay Their Employee Based on The Income They Bring into The Business?
Dognosis on 11/11/2022 - 13:11
Last edited 11/11/2022 - 19:43 by 1 other user
Last edited 11/11/2022 - 19:43 by 1 other user
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Some service based businesses refer to the rule of three being "Every $3 earned goes $1 to the owner, $1 to the employees, $1 to the company" but it's more a saying than a precise formula. Employees aren't asked to take a reduced wage during a month that the company needs to purchase new laptops etc.
This is probably the best rule of thumb to work off. My mate is an engineer and is on roughly $38 an hour. Any design work he does gets charged at $110 an hour to the client.
My mate is an engineer and is on roughly $38 an hour
How long has he been an engineer? Getting ripped off?
5 Years and nearly reached RPEQ status. I think he's getting ripped off
mate is an engineer and is on roughly $38 an hour
Why so low? I was on $76/hr as an engineer and I haven't done a degree.
I get paid $40/hr to squash cardboard boxes and put them in the dumpster.
They call handymen in Asian hotels engineers
$110 an hour charged to the accountant is crazy low for any work, let alone an engineer.
I used to bill out at $300 as a junior accountant over a decade ago.
You need to provide more context, what industry? how difficult is that market? what kind of money are you bringing in to them?
On top of that there are a number of ways commissions are paid, 25% based on what the value? the gross margin? one time? ongoing of total value?
without any of that, as you said its all going to be random…
If you're talking commission?
I've heard IT sales paying up to 25% commission
I have consultant friends who receive 10% commission of the ongoing billablesIf you're talking about running a business it'll be down to how much you value a decent employee and how scared you are of them bailing and leaving you high and dry.
I believe in some companies the employee gets to choose between a range (to have a lower fixed commission and a higher commissions based remuneration).
The labour cost in most businesses is between one third and one quarter of revenue.
Also consider who is "bringing in business" vs. those that are doing the work that has been brought in … and note there is no implication in that split regarding who genuinely generates the revenue … where the marginal cost of manufacture/production is close to zero, perhaps the sales team is more important … where those marginal costs are a high proportion, perhaps those doing the work are more important.
Your pay is based on how cheaply they can get labour. It's not what you're worth, it's what the next guy will cost.
You'd need to account for it and verify it in order to be able to claim it, assuming an agreement was in place. Without those four, for every payment… I'd have very little hope.
realise this could be a 'how long is a piece of string
Bro this is exactly what it is lmao
I’ve been on commission/bonus rates from 0- 90%…
Surely this would depend on the business. A salesperson? Probably gets a cut. An Engineer winning a project bid? Nope.