5 ms·

The very very rough conversion for normal 1099 contracting is adding the K's worth of zeros to the hourly rate, eg. $85/hr ~= $85K salary. Apparently with a W2

by j_s 9y ago

The very very rough conversion for normal 1099 contracting is adding the K's worth of zeros to the hourly rate, eg. $85/hr ~= $85K salary. Apparently with a W2 this number is net whatever the agency skims while covering some things; not sure how that stacks up.

scarface74 9y ago
Let me clarify. The hourly rate I was referring to was what the contractor gets. Not what the agency gets. I tell the recruiter and my manager the offer I think we should make the person and let the higher ups negotiate the bill rates the agency will charge the company. I haven't been second guessed yet.
Terretta 9y ago
No, double the hourly rate plus zeros. 40 hours x 50 weeks = 2000 hours So just 2x and thousands.
- j_s 9y ago
  Here's examples on HN of others using the rule of thumb I shared, which is definitely conservative: https://news.ycombinator.com/item?id=2185782 https://news.ycombinator.com/item?id=2185782 (Feb 2011) > zipdog: $40/hr contract is about $40k/yr permanent https://news.ycombinator.com/item?id=2438980 https://news.ycombinator.com/item?id=2438980 (Apr 2011) > techiferous: But remember that there is non-billable work (accounting, etc.) and a 15.3% self-employment tax. [...] Working as a consultant for $175/hour is similar to being employed at $175K/year. > danssig: Calling that pay rate $175K/yr is beyond conservative. NOTE: two users here also recommended your equation > slashcom: $x/hour * 40 hr/wk * 50 wk/yr = 2n1000 The general rule is always "times 2, add 3 zeros" > jurjenh: yes, this is generally the rule I use as well, take the hourly rate and double it and add a K (eg $30/hr = $60K) [...] Personally I use an estimate of about 75% efficiency > rapind: For 75% efficiency I assume you mean 3/4 * 2 * $175 * 1000 = $262,500 / year. https://news.ycombinator.com/item?id=5299009 https://news.ycombinator.com/item?id=5299009 (May 2013) > artumi-richard: The rule of thumb I was told is 1000 billed hours per year. -- To try to be genuinely helpful: a discussion documenting that hourly rates are a bad idea vs. charging per day: https://news.ycombinator.com/item?id=5714930 https://news.ycombinator.com/item?id=5714930 (May 2013) > gknoy: If you're doing freelance, you also have to cover downtime, business development, benefits Here's the article since the discussion's link 404's: https://web.archive.org/web/20161210162901/https://alanhollis.com/my-first-year-freelancing/ https://web.archive.org/web/20161210162901/https://alanholli... > Charge More: > · Take the salary you’d want to earn as a full time employee. > · Double it. > · Divide your doubled salary by the amount of days you’d work as a regular employee. > · This is the minimum rate you should charge per day. And this seemed helpful too (mostly connecting for my own future reference at this point): Poll: long-term contractors, what is your hourly rate? | https://news.ycombinator.com/item?id=5769348 https://news.ycombinator.com/item?id=5769348 (May 2013)
  - deleted 9y ago
    [deleted]
  - Terretta 9y ago
    Depends what you’re trying to calculate. If the idea is that independent small job (less than a year) contracting results in a 50% loss to overhead, then yes, just take hourly rate in thousands. This helps convince people to stop messing about with self-employment and just work for the man. If you mean how much money is in your bank account after a year of work for one company, contrasting a 1099 to FTE for a regular company, it’s the 2x + 000s formula. Unlike comments above, if you have your own LLC consulting business and run the 1099 payments through that, you can pay less tax as self-employed taking care of your own insurance and benefits.

by j_s 9y ago

scarface74 9y ago

Let me clarify. The hourly rate I was referring to was what the contractor gets. Not what the agency gets. I tell the recruiter and my manager the offer I think we should make the person and let the higher ups negotiate the bill rates the agency will charge the company. I haven't been second guessed yet.

Terretta 9y ago

No, double the hourly rate plus zeros. 40 hours x 50 weeks = 2000 hours So just 2x and thousands.

j_s 9y ago
Here's examples on HN of others using the rule of thumb I shared, which is definitely conservative: https://news.ycombinator.com/item?id=2185782 https://news.ycombinator.com/item?id=2185782 (Feb 2011) > zipdog: $40/hr contract is about $40k/yr permanent https://news.ycombinator.com/item?id=2438980 https://news.ycombinator.com/item?id=2438980 (Apr 2011) > techiferous: But remember that there is non-billable work (accounting, etc.) and a 15.3% self-employment tax. [...] Working as a consultant for $175/hour is similar to being employed at $175K/year. > danssig: Calling that pay rate $175K/yr is beyond conservative. NOTE: two users here also recommended your equation > slashcom: $x/hour * 40 hr/wk * 50 wk/yr = 2n1000 The general rule is always "times 2, add 3 zeros" > jurjenh: yes, this is generally the rule I use as well, take the hourly rate and double it and add a K (eg $30/hr = $60K) [...] Personally I use an estimate of about 75% efficiency > rapind: For 75% efficiency I assume you mean 3/4 * 2 * $175 * 1000 = $262,500 / year. https://news.ycombinator.com/item?id=5299009 https://news.ycombinator.com/item?id=5299009 (May 2013) > artumi-richard: The rule of thumb I was told is 1000 billed hours per year. -- To try to be genuinely helpful: a discussion documenting that hourly rates are a bad idea vs. charging per day: https://news.ycombinator.com/item?id=5714930 https://news.ycombinator.com/item?id=5714930 (May 2013) > gknoy: If you're doing freelance, you also have to cover downtime, business development, benefits Here's the article since the discussion's link 404's: https://web.archive.org/web/20161210162901/https://alanhollis.com/my-first-year-freelancing/ https://web.archive.org/web/20161210162901/https://alanholli... > Charge More: > · Take the salary you’d want to earn as a full time employee. > · Double it. > · Divide your doubled salary by the amount of days you’d work as a regular employee. > · This is the minimum rate you should charge per day. And this seemed helpful too (mostly connecting for my own future reference at this point): Poll: long-term contractors, what is your hourly rate? | https://news.ycombinator.com/item?id=5769348 https://news.ycombinator.com/item?id=5769348 (May 2013)
- deleted 9y ago
  [deleted]
- Terretta 9y ago
  Depends what you’re trying to calculate. If the idea is that independent small job (less than a year) contracting results in a 50% loss to overhead, then yes, just take hourly rate in thousands. This helps convince people to stop messing about with self-employment and just work for the man. If you mean how much money is in your bank account after a year of work for one company, contrasting a 1099 to FTE for a regular company, it’s the 2x + 000s formula. Unlike comments above, if you have your own LLC consulting business and run the 1099 payments through that, you can pay less tax as self-employed taking care of your own insurance and benefits.