The Old Joel on Software Forum: Part 3 (of 5) - Help in fixing an hourly rate.

Help in fixing an hourly rate.

Hi guys,

I've been job hunting and have been asked to come to an interview for a contract job in Manhattan. I've never worked as a consultant for a company and have no way of knowing how much compensation I should be getting?

I have 4 years of experience and this looks to be a financially healthy company. Also they have been recently acquired.

Can anyone give me advice on caculating an hourly rate that I should ask for? Its non-Windows work from what I can see so far...(Unix,C,C++...etc)..

Is $80,000 per yeear too much to ask for?

Thanks guys,

KernelHacker
Tuesday, November 25, 2003

I think you are dead on. $40/hour is fine, provided you have some good names on your resume and good references.

Dustin Alexander
Tuesday, November 25, 2003

In New York City? As a salaried person, I'd expect $80k would be the bare minimum you'd take. Now you have overhead of paying for your own insurance, finding your own work, additional 7.65% of self-employment tax, and you want to go out for a salaried value?

Brad Wilson (dotnetguy.techieswithcats.com)
Tuesday, November 25, 2003

For a new consultant without a name $40/hour is a decent in the door rate. Without knowing anything about your experience, that is what I would demand. You are looking to build a good client base.

Then again, New York is definitely not my locale.

Dustin Alexander
Tuesday, November 25, 2003

As an EMPLOYEE with benefits in NY and 4 yrs experience in what they want, $80k is the BARE minimum. If you are an actual contractor and you'll be paying your own taxes and there are no benefits, you should double that and target $160k in NY, as a minimum.

Dennis Atkins
Tuesday, November 25, 2003

You can make $100 an hour walking people's dogs in manhattan. I would charge AT LEAST $70 an hour.

_
Tuesday, November 25, 2003

A lot of people make the mistake of starting with a yearly salary and dividing it by the amount of hours worked to establish an hourly rate.

People who have made a living doing contract IT work will realize that they have to subtract about 2 days a week for working leads, subtract vacation/sick time, add in for health insurance, 401k, SE tax, etc....

So let's say I make 80K as an employee.

To make the equivalent as an IC, I would need:

80K + 500/mo ins + 500/mo annuity + ~15% SE Tax =
52 weeks - 3 weeks vacation - 1 week sick - 2 days/wk lead

so...

104000/1152 = 90.27/hr.

Why it's better to hire ICs, and why it sucks trying to be an IC: Most people doing it don't have a clue how to price their services, so you end up competing with people that underprice themselves big time.

mlr
Wednesday, November 26, 2003

KernelHacker, if you're not familiar with NYC, be sure you have a very clear understanding of what the cost of living is like before you accept the job -- better yet, before you bid. If you intend to live in Manhattan, $80K will buy you a marginally middle-class lifestyle. Your take-home will probably be about $40K (assuming that as a contractor you're paying both ends of FICA, etc.), of which you should probably budget $20-22K for rent and utilities if you plan to have a studio apartment without roommates.

Also, you might check with the folks on the New York section of this board (if you haven't already) to see what they think about rates.

John C.
Wednesday, November 26, 2003

>>You can make $100 an hour walking people's dogs in manhattan. I would charge AT LEAST $70 an hour.<<

What?!? C'mon. If this is true, then I'm moving immediately.

There's a big difference between making $100/an hour and making $100 IN AN HOUR...

Tim Lara
Wednesday, November 26, 2003

Tim,

Let me know when you get here. I'll buy you a beer.

I do MS Access, and only MS Access. I make $75/hour. That's the way it is here in NYC. But it's friggin expensive to live here. $1500/month will get you a studio apartment, but it will probably be over a bar, or in a semi-sketchy neighborhood.

Jeremy

JeremyNYC
Wednesday, November 26, 2003