For those bad at math

[Xiangyang Liu]

Wow, I like the amount of money I could have made doing consulting and felt bad that I did not. :-D

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[Ennis Ray Lynch Jr]

Well it isn't an amount but a direct correlation. If you think you are worth, let's say $50k a year annual salary you should charge $41 an hour for a 6 month contract. In the end it will be about the same on the annual taxes.

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[Ennis Ray Lynch Jr]

Yeah, on my blog I am going to format it but when I post on CP I have to allow little errors in my comments so people can offer funny critiques.

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[PIEBALDconsult]

No, 92, and take the other six months off.

[leppie]

Would a simple function be easier? ;P IOW:

Fulltime USD Per Annum: x
Consulting Rate (6 month contracts)/hr: x/1226
Consulting Rate (No Contract)/hr: x/1082

:)

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[Rob Graham]

so how did you arrive at the numbers? does this take into account the value of benefits (health ins., 401K contributions, holidays, vacations)? employer share of FICA/Medicare? How did you arrive at the penalty factor for no contract?

[Ennis Ray Lynch Jr]

It would but then people would but I think people like tables. Plus looking at the divisor might incorrectly lead people to believe they only need to work that number of hours per year. When the actual result is only achieved with an effort to work 40 hours per week every week except for two weeks vacation and 10 holidays.

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[Ennis Ray Lynch Jr]

It takes full into account health and benefits and fica medicare. There is some fudge factor based on down time between contracts. Up to %35 of your billable hours could be spent looking for contracts in some cases. Technically this is work, hard work, and needs to be accounted for. I like to think it can take up to 4 weeks to find a 6 month contract so I use, in my personal calculations a fudge factor of 8 weeks per year or 15% of available time as down time. The best way to use the number, let's use $50k again, is to say 41*1600 = 61,500 total expected revenue per year. $50k *.15 = FICA = $7500. Which leaves $4,000 for benefits. Which is a reasonable amount for someone with a $50k a year base salary. (I said reasonable not good) Of course, if you work more than 40 per week or have a better than average turn around on a contract you get the potential to earn profit.

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[Member 96]

Why'd you stop at 180k? :) I'm guessing if I was a consultant my hourly rate would be through the roof. :cool:

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[Member 96]

:laugh: Even if there aren't any errors you'll get lot's of little critiques from this anal retentive bunch. :)

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"The great pleasure in life is doing what people say you cannot do." - Walter Bagehot

[Bruce Chapman DNN]

It's an interesting table. Funnily enough you are within a couple of percent of what I charge / think I should earn if I were to get a job. Now I'd like to see a spreadsheet on how I can convince people that a $20/hr outsourced developer is not comparing apples with apples. Incidentally, do you advertise your rates or just save them up for when people ask?

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[Ennis Ray Lynch Jr]

I don't publish them online because there is so much competition online and many people will not call if they see you as too expensive. Its not top secret though, if it's something you are interested in send an email and I will give you the skinny.

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Happiness in intelligent people is the rarest thing I know. -- Ernest Hemingway

[ftw melvin]

I'd lose everything after the second decimal place for readability if you are going to post it. Interesting calculation, as a rule of thumb you are saying $1000 ~= 80c an hour. Converting this into English, if Joe Senior Dev earned around £40,000 per year they should only consider resuming contracting, after say six year's permanent frustration, if they were happy you could get £32 per hour consistently. I think you've made my Joe's mind up!

[ftw melvin]

http://www.contractorcalculator.co.uk/[^]

[Ennis Ray Lynch Jr]

The results of that calculator are no where near my results. I think mine are more realistic.

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Happiness in intelligent people is the rarest thing I know. -- Ernest Hemingway

[ftw melvin]

I'm sure yours are well researched, the tax conditions in the UK compared to the USA are quite different which could account for the difference. Just wanted to show you an alternative.