Re: Another Pay Question...Lone TW

Subject: Re: Another Pay Question...Lone TW
From: Tom Murrell <trmurrell -at- yahoo -dot- com>
To: "TECHWR-L" <techwr-l -at- lists -dot- raycomm -dot- com>
Date: Mon, 8 Jul 2002 06:37:31 -0700 (PDT)


--- Justin Ressler <JRessler -at- ewa-denver -dot- com> wrote:
>
> Do lone TWs often get paid more?
>
> I am on the verge of converting from Consultant to Employee (and not happy
> about it, just because of the pay cut) and I was wondering if lone TWs often
> get paid a little better?

Justin, I've heard this argument from employers and employees that
consultants/contractors/freelance writers or what have you are overpriced. It
really depends on the circumstances. If you are carrying your own overhead
(insurance, taxes, etc.), then you are charging, or should be charging, an
overheaded rate, and you should not expect to be paid at that same rate for the
same work if you are an employee. But that does NOT mean you are overpaid for
what you do.

If an employee's overheaded rate figures out to, say $150/hour, they are
probably being paid no more than $50/hour, less if they're on salary and
working more than 40 hours/week, which is what overheaded rates are figured at.
As a consultant carrying the full burden mentioned above, let's say you are
charging $100/hour, you are still cheaper than the employee being paid at $50
while the overheaded rate is $150. That's the mistake people make.

OTOH, I think you have to expect you will make less as an employee than you
will as a contractor, using the same figures above, which admittedly are an
example and won't reflect "average" experiences. What you need to look at is
what you gain and what you lose. As an employee, you don't have to worry about
taxes, bookkeeping, insurance, and equipment. These expenses cut both ways:
they eat into YOUR overhead as an independent, but they also are an expense to
an employer.

You need to figure out (a) what you are worth, both with and without overhead,
and (b) what they are paying someone who does similar work as an employee.
That's the other thing THEY are looking at. We pay X for this skill set, so if
you are taking that job, X is what you can expect (plus or minus 10%). Can you
afford to work for that much, or that little?

Well, that's how *I* understand things. I'm sure there are others who can flesh
it out and correct any errors I've made.

=====
Tom Murrell
mailto:tmurrell -at- columbus -dot- rr -dot- com
Personal Web Page - http://home.columbus.rr.com/murrell/index.html Last Updated 06/16/02
--Proud Vietnam Veteran. I am NOT a victim.--

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References:
Another Pay Question...Lone TW: From: Justin Ressler

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