# Help a dumb employer (me) calculate some math

Recently I hired an independent contractor (a web programmer, if you must know) through a third-party online jobfinding firm. While it costs me no extra fees, the firm takes a 5% commission out of whatever I pay my programmer. So this means that he’ll be getting less than the amount we agreed upon.

I’d like to account for that in my payment to this guy, and thus I want to add a little extra to our official transaction amount so that he receives the full sum he bid for. I know I’m getting a good deal on the project, and don’t want the programmer to the short end of the stick.

So. Knowing that the firm takes 5% off the top, and knowing that I want this kid to end up with \$250 (the amount we agreed upon), how much extra should I pay? I figured that this formula might work:

(x * .05) - y = 250

… but then I realized that calculating two unknown variables seems to be beyond my dim memory of algebra. (Um, or is it calculus? … ugh, sue me, it’s been more than twenty years.)

P.S. Please don’t suggest that I pay the programmer “off the books” (i.e., not going through the 3rd party). That’s not an option for us, since we already signed the agreement with the firm. The programmer already asked if we could do that, and I said no 'cause I’m a bit uptight when it comes to supporting online businesses. If it weren’t for this job firm I wouldn’t have found the programmer, so it seems only fair to support their business.

Use 1.05 x Price to get the price + 5%.

Oh, and that works the other way, too (in case that wasn’t evident). You can divide by 1.05 to get the pre-fee price, as well.

LOL, thanks, but I’m not that dumb! I did know how to figure out what 5% of 250 is.

My problem is that I want 250 to be the final amount received by my contractor.

For example, using the above figure, all I know is that 5% of 250 is 12.5. That doesn’t mean that I can pay \$262.50 and my contractor will receive \$250. If I pay \$262.50, the firm takes 5% of THAT amount, which is \$13.13 (roughly). That leaves my contractor with \$249.37. Close, but no cigar.

Does this make sense?

So pay 265 and call the 1.75 a tip…

I’m pretty sure there is a formula for this, I just don’t know it.

So that he gets the right amount after deducting 55, I think you have to add a little more than 5%. In particular, you have to divide by 0.95, which is approximately the same as multiplying by 1.052631579. If you take 5% off \$105, you get \$99.75 – short-changing the contracter by two bits in 100 bucks.

I should have said “after deducting 5%” there, of course. To give him \$250, the right amount to the nearest cent is \$263.16.

Giles is right. The programmer will get 95% of what you pay him. The company will get 5%. You want the 95% that goes to the programmer to come out to be \$250.

0.95*x = 250
x = 250/0.95

x is about \$263.16, as Giles says.

What has just be demonstrated here is the difference between profit and markup. They’re not the same thing.

WOOHOO! Thanks, guys, especially elfbabe and Giles! The SD geniuses come through for me again.

elfbabe, that formula is exactly what my dimbulb mind was unable to come up with! Duh, of course now that I look at it, it makes total sense – 250 needed to be 95% of ____. :smack: Yeesh, it’s scary getting senile at 37.

Now I’ll be able to figure out the PayPal transaction fee into the bargain as well.

And LOL to P_T_. I was ready to throw in the towel and just invent an approximate figure, but the anal retentive part of me needed to know the correct amount – and the intellectually curious part of me wanted to know the formula!

Many thanks again for the very speedy help.