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
consultant hourly rate needs to be twice an employees hourly rate
Lou Pogoda <firstname.lastname@example.org> 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
>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
>Phil Rack wrote in message ...
>>Hell, for $100K/hr I'll do some incredible SAS programming!!!! That's a
>>pertty good mark-up!
>>DeskTop Solutions, LLC
>>A SAS Quality Partner
>>6161 Busch Blvd., Suite 120
>>Columbus, OH 43229
>>Tel: (614) 848-3714 Fax: (614) 848-4780
>>From: Andy Kowalczyk [mailto:akowalczyk@WCRINET.ORG]
>>Sent: Saturday, April 28, 2001 8:19 AM
>>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>
>>>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 :-)