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Table 2 • Sierra Cybernetics Pricing and Markup Information Resource ,Type W2 Employee Marlwp % Corp -to -Corp Marknp %0 Est hours Until Rate See Note A Below (Type 1 Consultants) Drops to Identified See Note B below Resource Markup%, Proposer Found See Note C below 20% 1200 Resource ttlantitied See Note D below 9%u Not Applicable Resource 'Vote A — Sierra's basic markup consists of corporate overhead rate +general and administrative rate+ profit. That amounts to 24%. Note B — Because Sierra Type I (C2C and 1099) consultants require less overhead, we reduce our basic markup on them from 24% to 20%, Note C -- W-2 employees are provided benefits, which costs are additive to our basic markup, we offer W-2 ernployces three categories of employment (Types 2,3,4) with varying degrees of benefits, witli three different markup percentages, In cach case, the billing rate to the client is the same, but the employee can choose a benefit package that best suits their need with a corresponding difference in their underlying pay rate. Le., selection of lesser benefits results in a higher hourly pay rate, and conversely, to the employee. We describe this arrangement as being "compensation neutral" so that, at the end of the clay, the net value to the employee is targeted to be the same. Typo 2 -No benefits. Sierra only withholds payroll taxes and pays the corporate social security, Medicare, and unemployment insurance costs. Total markup on top of pay rate is 38% 'type 3 — Limited benefits. Typs 2 plus paid leave days plus a stipend toward employee purchase of medical insurance. Total markup on top of pay rate is 4 L5%. Type 4 a -Full benefits. Fully -benefited employee with full taxes withhold, full insurance coverage, full paid leave, and access to Sierra's Cafeteria 125 Plan. Total markup of top of pay rate is 61%o. Note D — We currently utilize this "payrolling" program with some of our other clients. The approach is the same as described under Note C, with the benefit percentages being the same, but the overhead plus G&A plus profit amount being only 9%u. So, Type 2 markup = 24% Type 3 markup =30.5%0 l'ypo 4 markup = 50% **Proprietary Information** SIERRA 5-3 SC20-011 CYBERNETICS Santa Ana ITProfessional Services