Re: Salary Survey from STC

Subject: Re: Salary Survey from STC
From: Barry Campbell <barry -at- WEBVERANDA -dot- COM>
Date: Wed, 10 Jun 1998 15:25:16 -0400

At 01:10 PM 6/10/98 -0500, Steve Taylor wrote:

>Chart 3 indicates an average national contracting rate of 48.50. The average
>person works 2008 hours a year. That is $97,388. If that's low, I am doing
>something wrong.

No offense, Steve, but you're doing something wrong: there's more
information that needs to be factored in.

First, you're assuming that every hour worked is billable. Figure 18
indicates that survey respondents work roughly forty hour weeks (okay,
38.8), but not all of that time is billable. Figure 19 shows that, on
average, 80% of time worked by survey respondents is billable.

Let's run the new numbers:

38.8 hours/week * 52 weeks (assuming *no* vacation time or down time--
highly questionable assumptions in my opinion, but let's let that ride
for the moment) = 2018 hours worked in a calendar year.

Now, let's estimate how many of those hours are actually billable:

2018 hours/year * average billing rate of 80% (.8) = 1614 billable hours
per calendar year (it's not altogether clear whether vacation time or
down time were factored into this "billable percentage".)

So. Already we're down to 1618 * 48.50) = estimated annual gross of $78,473
(and, again, this may well assume *no* vacation time and *no* down time,
since there are many tasks which must be performed in the course of doing
business that cannot be ethically billed to a client.)

Presto! Almost $20,000 gross per annum disappears through the magic of
statistical interpretation. :-)

If you're a 1099 employee, you do your own withholding and SocSec, which
must be escrowed against your quarterly tax payments... and after you
pay Uncle Sugar there are *many* other overhead expenses to be factored
in: insurance, training, equipment, investing for retirement, and so
forth.

All in all, a good contractor who stays busy and billable *can* make
more money than a person in a staff job, but it's by no means a given.
The extra money can be thought of either as a risk premium or as a
reward for doing your own marketing and management--in reality, it's
a combination of the two.

I do know many technical writers, both staffers and consultants, whose
gross 100K a year or better, by the way.

On the other hand, I live in New York City, where you can qualify for
subsidized housing, under certain circumstances, with an income of up
to $135K a year. Average rent for a one-bedroom apartment in my
neighborhood is $1,500; if you have an actual family with kids and dogs
and so forth, you're looking at between two and three thousand a month
in rent for a habitable place.

Everything is relative.

Best regards,

Barry Campbell
Barry Campbell * barry -at- webveranda -dot- com * 40.77 N, 73.97 W
--
[O]ne of the strongest motives that leads men to art
and science is escape from everyday life with its
painful crudity and hopeless dreariness...
-- Albert Einstein, "Principles of Research" (1918)




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