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View Full Version : What does 80 - 20 split rate mean?


humdesi
08-31-2007, 12:35 AM
When a consulting company says 70-30 or 80-20 split rate does the consultant actually get to keep the 70% or 80%? I mean if the consultant is in W-2, the company has to pay payroll and corporate taxes. Does this come from the consultant's 80% or the company's 20%?
Note, I am not talking about the personal income tax the consultant has to pay anyway.

diptam
08-31-2007, 12:46 AM
and you should see the Weekly Gross as [AAA/Hr X 8Hr X 5 X 80%] in the paystub.

When a consulting company says 70-30 or 80-20 split rate does the consultant actually get to keep the 70% or 80%? I mean if the consultant is in W-2, the company has to pay payroll and corporate taxes. Does this come from the consultant's 80% or the company's 20%?
Note, I am not talking about the personal income tax the consultant has to pay anyway.

krupa
08-31-2007, 01:39 AM
The following are guide lines for negotiating with employer. Normally the following are general terms , subject to agreed terms.

80-20 Means
1.Employer pay his contribution of social securty + admin expenses.

2.1 Employee has to bear his contribution of social Security + Income tax
2.2 Employee has to bear his medical insurance.
2.3 Employee has to bear H1B and green card expenses
2.4 Employee has to bear job related travelling expenses

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70-30 means
1.1 Employer pay his contribution of social securty + admin expenses.
1.2 Employer has to bear employee medical insurance.
1.3 Employer has to bear H1B and green card expenses.


2.1 Employee has to bear his contribution of social Security + Income tax
2.2 Employee has to bear job related travelling expenses

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natrajs
08-31-2007, 09:18 AM
When a consulting company says 70-30 or 80-20 split rate does the consultant actually get to keep the 70% or 80%? I mean if the consultant is in W-2, the company has to pay payroll and corporate taxes. Does this come from the consultant's 80% or the company's 20%?
Note, I am not talking about the personal income tax the consultant has to pay anyway.



Yours is 80 % and the Company 20%

humdesi
09-01-2007, 01:08 PM
I think I understand how it is supposed to work. But I want to know how it actually happens with desi consulting comapanies? I have a friend who was promised a 70-30 split (could be 80-20, unsure of exact number). But the desi employer is asking him to pay employer share of taxes as well. Is this a common practise with desi consulting company?

Also, for PERM purposes, what should the salary be?