I figure my bill rates on a straight mark-up of whatever I’m paying the talent. So for every additional dollar I pay my talent, I charge that dollar plus the appropriate markup on that dollar to my client. I generally settle on a pay rate with my talent before quoting their rate to clients. On the rare occasion when I have the bill rate set with no flexibility, I explain that situation to the talent and allow him or her to decide whether it’s fair compensation for their time. If it’s not, I simply have to explain to the client that their budget is insufficient to get the person they want, or I’ll cut my markup to make it fit if it’s a client I really need to keep happy.

It’s a candidate’s market in DC IT, and I can afford to push for higher pay rates for my talent. Which is why they like working for me.

Also, I don’t work on commission, so the rate I get the talent to accept has no impact on my paycheck at all.

I’d like to point out one innacuracy that I’ve noticed in your post. You say “it is in our best interest to get you as much money as we can without screwing the deal.” That’s only true for full time positions – your commission is 5% (for example) of what a candidate will make a year, so it is in your best interests for the candidate to get an offer for 120K a year instead of 100K. However, it’s completely opposite for contracting jobs. A client pays the recruiting company, say, 80/hour. So it’s in your best interest to get the candidate to accept a 65/h instead of 70/h, because the difference goe s to you. So it’s not always that your best interests are aligned with the candidate’s.