Date:         Sun, 29 Apr 2001 23:17:43 +0100
Reply-To:     Peter Crawford <Peter@CRAWFORDSOFTWARE.DEMON.CO.UK>
Sender:       "SAS(r) Discussion" <SAS-L@LISTSERV.UGA.EDU>
From:         Peter Crawford <Peter@CRAWFORDSOFTWARE.DEMON.CO.UK>
Organization: Crawford Software Consultancy Limited
Subject:      Re: Slightly Off-Topic -- Consulting vs. Full-Time Wages

I support of Lou's view.
I remember an old statistic, that an employee costs a company twice his
salary. (Consider the cost of benefits and employers taxes).
This provides a simple (naive ?) basis for comparing rates.
As an independent consultant, you become your own employer, so allow for
50% overheads.
  consultant hourly rate needs to be twice an employees hourly rate

Lou Pogoda <lpogoda@home.nospam.com> writes
>It isn't, really.  There are roughly 2000 working hours a year (50 weeks a
>year, 40 hours a week).  If you are making $100k a year as a salaried
>employee, that's an hourly rate of 100,000 / 2000 = 50 an hour.  But that's
>just salary.  To stay even, you need to add in the fact that you're NOT
>getting paid vacation, paid holidays, paid sick time, life insurance,
>medical insurance, disability insurance, pension plan, 401k match, tuition
>reimbursement, and whatever other  employer-paid "fringe" benefits are on
>your list.  Professional education - the short (a week or less) seminars and
>such that you attend to just keep abreast of developments, user group
>attendance, etc - becomes your own lookout and it's a double hit - not only
>do you have to pay for it yourself, but you can't bill for the time.  You
>need to pay self-employment tax and make estimated tax payments - most
>people end up hiring an accountant to handle taxes.  You probably need
>professional liability insurance.  And you have to make allowance for down
>time, for the inevitable occasions when a job ends and you don't have
>another one to on start right away.  There's the problem of collections from
>slow to pay clients.  And lastly, there's the utter, complete lack of any
>sort of job security whatsoever - you can be let go at any time, for any
>reason, with no more than perhaps a few weeks' pay as severance if that's in
>your contract.
>
>Rates are essentially set by the market.  For some people, market rates will
>cover all this stuff and some besides, and turning consultant is a
>reasonable thing to do.  For others, rates won't, and they might be
>economically better off as salaried employees.
>
>You can make a good living as a SAS consultant, but it's nowhere near as
>good as a naive comparison of the gross billing rate with your base pay
>would suggest.
>
>Phil Rack wrote in message ...
>>Hell, for $100K/hr I'll do some incredible SAS programming!!!!  That's a
>>pertty good mark-up!
>>
>>Phil
>>
>>Philip Rack
>>DeskTop Solutions, LLC
>>A SAS Quality Partner
>>6161 Busch Blvd., Suite 120
>>Columbus, OH 43229
>>
>>Tel: (614) 848-3714     Fax: (614) 848-4780
>>E-mail: philrack@minequest.com
>>web: www.minequest.com
>>
>>
>>
>>
>>
>>-----Original Message-----
>>From: Andy Kowalczyk [mailto:akowalczyk@WCRINET.ORG]
>>Sent: Saturday, April 28, 2001 8:19 AM
>>To: SAS-L@LISTSERV.UGA.EDU
>>Subject: Re: Slightly Off-Topic -- Consulting vs. Full-Time Wages
>>
>>
>>On Sat, 28 Apr 2001 01:06:18 -0700, Karsten M. Self <kmself@IX.NETCOM.COM>
>>wrote:
>>
>>>
>>>All this considered, a common rule of thumb is to take your annual
>>>salary in thousands, double this in dollars, and call it your hourly.
>>>If you were making $100k/yr, your hourly equivalent is $100k/hr.  This
>>>is rough and skips a lot of details, but is commonly used.
>>>
>>
>>I think Karsten is also factoring in the conversion to Canadian Dollars :-)
>
>

--
Peter Crawford