[Baypiggies] How do you calculate your hourly wage?
davidoff56 at alluvialsw.com
Tue Feb 10 00:39:37 CET 2009
I've been consulting for eight years. I agree with much of the advice
already given. Here are some additional thoughts.
First of all, decide if you want to make a go at consulting as a career
move, or is contracting something temporary until you can line up a job
as a full-time employee. That will help you to decide how much business
structure you want to put in place (business entity, insurance, etc.).
If you will be paid on a 1099 basis and not on a W-2 as an employee of a
contracting company, you'll pay double the Medicare and FICA taxes you
see on your pay stub. Individual policies for medical insurance are
expensive, and can go up by 20%/year (when I crossed an age boundary,
mine when up by almost 50%). Depending on where you live, you might
need a business license. Get at least a general business liability
policy (which does not cover you for professional liability, a.k.a.
errors and omissions, which is very expensive). Before you start, get
professional advice on taxes, what you can deduct as a business expense,
record keeping, etc. You might need to make quarterly estimated tax
payments. Sign a contract before you start work: you may need legal
advice from an attorney. It is a good idea to set aside cash for an
emergency fund so you can survive for at least six months without any
When you first start out, there is a lot to learn, things to take care
of, and it takes time that you can't bill for.
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