[Baypiggies] How do you calculate your hourly wage?

Glen Jarvis glen at glenjarvis.com
Mon Feb 9 23:38:38 CET 2009


    The largest mistake I ever made in contracting was not charging  
the rate that the Small Business Association (SBA) in San Francisco  
taught me to charge. It just seemed so high, and I doubted (and still  
doubt) I was *worth* as much as that. I was also brand-spanking new to  
Python (I've only been coding in Python a little over a year), so  
there is some justification for me to be less than what you would  
probably charge.

     However, here's the calculation: take the calculation you  
mentioned to find your normal hourly rate (minus benefits). Then,  
multiply the number by 2.5.

     That's a rough estimate. If you can calculate your benefits more  
accurately, great! But,  realize that there is more than just benefits  
involved here. You won't be working '40 hours per week' at the new  
rate. A good deal of time is spent in administration, billing, sales  
(getting new clients), etc.  So, this *really* needs factored in. How  
much time you spend doing these necessary evils, compared to coding  
varies a lot with people.

     Some people, depending upon their profession, are only 'billable'  
30% of the time. I feel it's much higher for programming. Because I'm  
still learning a great deal, I spend a lot of time learning within a  
project, so I bill a very small portion of the amount of time I put  
into a project. However, I think that's just me and my newness.

     The SBA courses are completely free and are an *incredible*  
resource if you wish to learn how to avoid gotchas and pitfalls on the  
business side. Ask me off list and I'll forward some details for you  
on the courses.

     Hopefully that helps a little...

Take care and good luck. Happy Coding and Contracting =)


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On Feb 9, 2009, at 2:22 PM, Stephen Cattaneo wrote:

> Hi friends,
> I've only had one professional position since college.  I was paid  
> salary.  My company recently downsized 40% of the company (myself  
> included).  I'm looking for new work.
> I'm open to contract jobs, but they want to know how much I charge  
> hourly.  I'd assume they do not cover things like 401k/dental/ 
> medical for such a position;  I'd like to take these things into  
> consideration when talking wages.
> Do you guys use this formula (or something similar) and if so, what  
> value do you use for your modifier?
> hourlySalary = yearlySalary /  52 * 40  # 52 weeks in a year, 40  
> hours in a week
> benefits = hourlySalary * benefitsModifier
> totalHourlyWage = hourlySalary + benefits
> I was thinking something between 5% and 15% -- Does this seem  
> reasonable in your experience?
> Cheers,
> S

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