Re: Any $ Tips about going Contractor to Perm in Same Firm?

Subject: Re: Any $ Tips about going Contractor to Perm in Same Firm?
From: Sandy Harris <sandy -at- storm -dot- ca>
To: "TECHWR-L" <techwr-l -at- lists -dot- raycomm -dot- com>
Date: Sun, 25 Mar 2001 13:29:23 -0500

Dia Blankenship wrote:

> > I recently went from contracting to full-time. The rule-of-thumb I used
> > ... was to
> > multiply my hourly rate by $1,000 to obtain annual salary.

> Ooooh, I strongly disagree with this one. I'd be losing about $25k a year
> if I went with this scenario... And I don't think I'm undercharging on my
> freelance rates.

A rule I've seen used for contractors is:

annual salary / 100 = daily rate

So, for example, if an employee would get $60,000/year for the job, expect to
pay a contractor $600 a day. By your rule, $60 an hour. Not identical results,
but similar enough since both are just rules of thumb anyway.

If the contractor works a full 220-day (5*52 minus various leave and holiday days),
at $600 a day, he/she gets $132,000. Somewhat less by your rule (roughly 105,000
if my mental arithmetic's right) but in either case a lot more than the employee's

This is fair. The contractor has more risks and the employee gets more benefits.


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