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The overhead on an employee is more like 20–30%, not 100%. Separately, the value of a contractor is different than the value of an employee, so why should the

• arcticbull 4y ago
  > The overhead on an employee is more like 20–30%, not 100%. That's a separate question, and personally I prefer double as a rule of thumb (I've read some studies to support that number) - but 20% is outright wrong. You'd pay 20% for office space rent alone. Employer portion of payroll taxes are 7.65% and health insurance in the group markets is $600/mth. Then add in legal, hardware, software, servers, HR tools, accountants - it adds up fast. However my point was that it accounts not just for your overhead (remember you have significantly worse economy of scale at 1) but also, and this is critical, your pipeline not always being full. As a contractor you won't always have a job, and you should account for that in your estimation. > As a contractor, you're not only help the client with a project but you're also saving them the time, effort, and risk of bringing someone in full-time... Why not charge for that? You are, about double. Like I said, $100K/yr -> $100/hr is $208K/yr. This isn't a perfect system, but it's a good rule of thumb. [1] https://www.iofficecorp.com/blog/space-management-empty-desk https://www.iofficecorp.com/blog/space-management-empty-desk