Hey all, I’m drafting an RFP bid, and struggling with a number to include for client’s responsibility for allocated overhead, benefits, payroll taxes, etc. Any thoughts on what is customary here? Thx!

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~15-20% is customary for margin/overhead.

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I typically find it closer to 18-23%. There are also a lot of factors. If the people you’re budgeting for are staff positions then they generally want to know the hours but aren’t concerned with including those costs in a production budget (they are amortized over multiple jobs through the year).

You should also be marking up everything. Lean heavy on your estimate. That way, worst case is you’re coming in high where the client has already approved...

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If you’re cost plus then they’ll want to see backup anyway. It’ll make it harder to hide money, but also puts a lot of the onus on them, since they’ll see your budget the whole time

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The multiplier to account for all employee costs is usually in the 2.1x - 2.5x range, depending on true OH costs in your market and agreed margin. Example: an employee with a base $100k salary should bill out at $230,000 if you determine your multiplier is 2.3x.

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Do you mean your margin?

Yes this is part of the margin from my perspective. So I’m having the client cover an allocated amount of employee salaries as part of the itemized costs, and then I’d like to add on top of that some allocation for employee benefits, payroll taxes, overhead (which is the focus of my question), plus a 20% margin on top of that. That make sense?

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