Re: Re Fair Cut

[Dick Margulis <margulis -at- fiam -dot- net>]

Wally,

I was not aware that the discussion involved a 1099 relationship. I tend
to think of those as independent contracts, not agency contracts. In my
experience with agencies, the writer is generally a W-2 employee of the
agency.

Further, I did not say that the agency pays the employee's share of
FICA, nor did I say anything about withholding taxes. I limited my
comments to employer-paid payroll taxes.

I take exception to your assertion that what I offered was nonsense.

Dick

Wally Glassett wrote:
> 
> Absolute nonesense. For a 1099 contractor the agency keeps 100% of their
> "cut" or margin. In the example given, $50/hr to the contractor and $25 to
> the agency, over a 6 month, 1000 hour contract that is $25,000 to the agency
> who, after finding and placing you, normally does very little beyond
> processing timesheets and invoices two times a month and sending the
> contractors 1099 information to the IRS once a year. That is a lot of agency
> income for not much work.
> 
> If you are a W-2 contractor then FICA, income tax and other withholdings are
> taken out of the contractors $50/hour. The agency does pay other taxes, but
> certainly not all of them. Many agencies offer benefits to W-2 contractors,
> but they are not what anyone would call competitive benefits like those of
> many employees.