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I don't think it materially affects the calculations presented, but I get the feeling the "value of vacation time" logic is flawed and works approximately in th
by sopooneo 5y ago
I don't think it materially affects the calculations presented, but I get the feeling the "value of vacation time" logic is flawed and works approximately in the example only due to small relative vacation time.
From the article: I’m figuring if you make $100k, and work only 50 weeks, that’s $50/hr. So 2 weeks (80 hrs) at $50/hr is $4k
But change the numbers: I’m figuring if you make $100k, and work only 2 weeks, that’s $1,250/hr. So 50 weeks (2,000 hrs) at $1,250/hr is $2,500,000
I admit, you could turn these numbers around and use them to determine how much you need to charge per hour. But that's just it: I believe you need to look at (total comp) / (total hours worked) with vacation reducing your denominator in both the salaried and self-employed scenarios.