Re: Hourly rates for contractors

[Pete Kloppenburg <pkloppen -at- CERTICOM -dot- CA>]

Chuck Martin suggests:
> My informal review of rates suggests that the hourly number
> for contracting approximates the annual number, in thousands,
> of salaries...For example, if companies are paying $40-50,000
> for a staff writer with certain skill sets, then a contractor
> with similar skill sets should be able to charge $40-50 per hour.

Hmm, that's really quite interesting.  If you work it out, that's
a pretty reasonable guide. Figure this: a year of five day weeks,
less two weeks vacation, is about 250 working days.  But if you
go by the formula above, you only have to work 125 8-hour days (I know,
snicker snicker, who the hell works 8-hour days any more) to collect
the same gross income.  So Chuck's guide boils down to charging a
contract rate twice the nominal permanent rate.

But then consider again: I've heard a couple of times before that
the true cost of an employee to a company is actually something like
double their salary, after you factor in benefits, office space and
equipment, etc.. So, really, Chuck's guide leaves a company at just
about the break-even point, assuming no benefits for a contractor and
no cubicle or computer supplied.

Lots of factors can push a rate up or down, of course.  But before you
confront those issues, Chuck's formula sounds like a not bad baseline
from which to determine an hourly rate.


Pete Kloppenburg - pkloppen -at- certicom -dot- com
Technical Writer
Certicom Corp
Mississauga, Ontario,
Canada
http://www.certicom.com

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