[OMGWTF]

> No it does mean the overhead is 280% if defined the same way as the university (overhead is calculated as percentage of non-overhead costs, not overall costs).

But he said:

> That is my billing rate to the government is 2.8 times my hourly rate as determined by my salary.

Doesn't that mean that the government pays a total of 2.8x his salary, so overhead would be 180% (+100% salary = 280% total)? Or what mistake did I make here?

[michaelrpeskin]

Yeah, I don't know exactly what is called "overhead" if it's the full 2.8 or 1.8 above my costs. All I know is the accountants told me to write down 2.8 and that the bill that we send the government is 2.8x what I make "hourly" for the hours work on that contract.

[bena]

Yeah. So for every hour you bill, about 35 cents of every dollar goes to you and 65 goes to the company.

And this is where it's weird, because 65%, 180%, and 280% are all valid, but different, ways of looking at it.

Because you get 35% of the money, the company gets 65%. i.e. 65% of your billable hours are overhead.

Or, the company gets 180% of what you get. Or, you could say your overhead rate is 180%.

Or, you charge the government 280% of what you get paid. Which is the effective end result.