[Baypiggies] How do you calculate your hourly wage?

[Alex Martelli]

Sorry, I don't know about much about the cost/value of US benefits (my
experience as a freelancer was based in a European country where I got
medical, though not dental, coverage through a public service anyway),
but a useful rule of thumb is to charge based on the assumption that
you'll be able to bill around 1,000 hours/year -- this takes into
account the amount of time & energy it takes to "sell" your services,
and also the direct expense that may be incurred that way.  For a
long-term guaranteed contract you might want to offer some discount
from that base hourly rate, since it reduces the "selling" overhead
and uncertainty.  But for example if you know you need at least 80,000
/ year (gross of taxes) to survive and pay your mortgage, as a
baseline you should think of charging at least $80 / hour, even before
you think of health coverage costs, _not_ around $40.

One thing I do know about cost/value of US benefits (and other
overhead and incidentals) is that the "fully loaded" cost of an
employee typically works out to about twice as much as that employee's
salary.  Funny enough, the same 2:1 rules of thumb applies in Italy
although for example health care is not typically included in benefits
(but for example a mandatory monthly "lay-away" by the employer
towards a severance payment for the employee IS mandatory in Italy).
I have not been managing and responsible for budgets in other
countries so the US and Italy are the only two data points I have
here.


Alex

On Mon, Feb 9, 2009 at 2:22 PM, Stephen Cattaneo
<stephen.cattaneo at gmail.com> 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
>
> --
> ---
> Failures are finger posts on the road to achievement.
>
> -- C.S. Lewis
>
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