USA Percentage of billing as compensation at tax firm


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I have not had this type of compensation before in the last 5 tax seasons where I've worked at a CPA firm. It seems to me, I could be wrong, but that it is more advantageous for the employer to pay the employee on a percentage of billings. I'm a CPA working remotely for a company now. In the past it has always been that I track my time for each project and my comp is either an hourly rate times hours worked or a salary straight which is paid throughout the year regardless of whether I'm busy with work and there are billings.

I'm being paid at 20% of billings. Is this normal? Let's say a typical return takes me 2 hours to get through. My rate has been around $50/hr in the past. If I take 3 or 4 hours, I'm getting short changed. If his typical fee is $600 for a 1040, then that's $120. I"m out $80. $50*4hours=$200 normal comp. (200-120) I understand that if I only take 1 hour to do a return then I"m on the plus sign, however my thinking is that there will be far more returns where I'm getting short changed. He has no time budgets for projects and he would have to adjust the tax return fees based on additional time I spend. But this seems risky. At least with straight hourly rate and hours, I know what my comp will be, and I"m applying for a mortgage shortly.

What is the experience of others here who have been paid on % of billings?

Thanks.
Scot King, CPA
 
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