H1B Employment - The 80-20 billing formula explained!

Talented IT professionals working under the H1B Visa program in the US are nowadays looking for ways to boost their income. The most common method of doing so is to opt for the 80-20 billing formula that is prevalent among H1B visa holders. The 80-20 formula is applicable for companies which use their in-house H1B visa talent to work for IT solutions to other companies. IT talent are paid by the hour and the employer keeps 20% of the pay while 80% is given to the H1B talent.

This might seem like a lucrative method to earn quick cash that can easily amount to huge savings. However, there are a few factors to consider before opting for the 80 – 20 billing over the regular standard salary.

How big is the project?

The 80 – 20 rule can be very profitable for both the employer and the employee if the project is huge and will go on for months or years together. If the project is relatively smaller and if you company does not have other projects in the pipeline then you might end up on the bench for long periods of time in-between projects!

Salaried individuals will be paid during their term on the bench but 80 -20 billing will leave you without pay when in transition between projects.

Are your skills in demand?

Not all IT professionals under the H1B program can opt for and get away with the 80 -20 formula. Employers agree to this arrangement only if the talent is indispensable and also in demand. If there are a number of people who are working in your technology, chances are your proposal would be turned down by the employer. Improve your IT skills before you approach your employer with the proposal.

What are your commitments?

80 – 20 formula will get you a good payout only if you are consistent in working towards completing the project. It will also involve moving around the US to client locations. If you are single or living away from your family, this could be ideal but if you are living with your family it could become a hassle. Also, since 80-20 pay is by the hour, if you are taking too many off days, you could be hit without pay for those days.

Will you be travelling back to India anytime soon? Make sure you plan ahead before starting off on a project so that you do not miss out on work time.

Stay tuned to Career Corner for the next article on the questions you must ask your employer before initiating the 80 – 20 formula of pay structure.