Is a vendor cut illegal?

No — some spread is legitimate (overhead, benefits, margin). The point is transparency: know the bill rate and what reaches you, and watch for excessive layers.

How do I find the bill rate?

Ask. You can also infer it from the spread; the money-trace tool helps you model the layers.

C2C vs W-2: where your bill rate actually goes

On staffing chains, the rate a client pays isn't what reaches you. Each vendor layer keeps a cut. Here's how to see where the money goes.

The waterfall

Client bill rate → prime vendor (keeps a cut) → sub-vendor (keeps a cut) → your employer → you. Real per-layer cuts often run 8–30%+, so the 'we only take 1–3%' line is usually a myth.

On W-2 direct there's no vendor chain — the trace is simply bill rate → employer → you, minus legitimate employer burden (FICA, benefits) of roughly 10–20%.

Why it matters

A large spread between the bill rate and your pay is a negotiating signal and a question to ask. It also interacts with prevailing-wage rules: your employer still owes the required wage regardless of vendor cuts.

Frequently asked

Is a vendor cut illegal?: No — some spread is legitimate (overhead, benefits, margin). The point is transparency: know the bill rate and what reaches you, and watch for excessive layers.
How do I find the bill rate?: Ask. You can also infer it from the spread; the money-trace tool helps you model the layers.

Educational summary, not legal advice. Figures come from official U.S. government data and may lag 1–3 months.