Pay Rate vs. Bill Rate

At MBO Partners, we recognize that flexibility is critical. To stay successful over the years, we've expanded our offerings to serve contractors of all types, rates, locations, and work styles. And we recognize that our flexibility must also accommodate for individuals new to the nuances of the contracting world.

MBO Partners: Experienced with the Inexperienced

Experienced 1099 and S-Corp consultants already understand the financial implications of the independent work style; specifically, the responsibility for paying their own Employer Payroll Taxes and the need to wait several weeks or more before receiving payment. They therefore negotiate a billing rate that already factors these in.

But what about contractors who have always been W-2 workers in the past? They may not understand Employer Payroll Taxes and probably expect to be paid regularly (and immediately) for their work. Typically, their concern is not their billing rate, but their pay rate (or the amount that they receive).

When contractors who are new to working independently are referred to MBO Partners, we help convert their pay rates to billing rates that account for appropriate taxes. This promotes the smoothest possible transition for even the most inexperienced contractor.