[Baypiggies] How do you calculate your hourly wage?
ddf at iqdotdt.com
Tue Feb 10 00:18:54 CET 2009
On Monday 09 February 2009, 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
> 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
> benefits = hourlySalary * benefitsModifier
> totalHourlyWage = hourlySalary + benefits
> I was thinking something between 5% and 15% -- Does this seem reasonable in
> your experience?
I have been working in consulting in Civil Engineering since 1970 and
yes, to survive one has to charge an hourly rate that at first seems
way too high but after years of experience it is not. Being able
to bill out more than 50-65 percent of the time comes rarely.
There are endless things needing to be done that no one can be
asked to pay as a direct charge to their project. Currently I
am charging $120/hour, which I need to raise to $140 to $160/hour
on my next contracts. A rule of thumb to use is to take your
desired hourly rate, the one you would be paid if you were
employed somewhere (do not include benefits) and multiply
by 2.5 to 3.0. (To put this in perspective, the rates I
charge, are less than that charged by junior-level attorneys:-)
Typical rates for an attorney with the experience I have in
my field would be $500 to $1200/hour--perhaps we picked the
wrong field:-) )
Another option, if the task seems well defined and you are confident
in your ability to complete it, is to seek a lump sum, but many
clients do not like it. I rarely get such arrangements, but in
many cases I would prefer them. Tally up the total for the project
and then specify what is delivered and that is that--no hourly charging
etc, but then you have to get the work done for that amount and deliver
what you promised! The risk for loss is greater, but if done well, the
risk for larger margins is greater as well.
Hope this helps.
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