Personnel (HR) question

[Mom to Brandon and 2 cats]

Hi,
I have an opportunity to become a contract employee (read - no benefits). What kind of markup off the original benefitted, salaried, position should I ask for? 30% markup? 40% markup?

Thanks for your expertise!

[LBW]

When I was a manager, it was somewhere aroung 35%. That's the number my husband used when he negotiated a contract position.

[bunnisa]

It can be twice as much (not unheard of!) but in DH's experience, around 40-50% more.

Which field are you in? that makes a difference.

Bethany
blessed wife and mama to two!

"And children are always a good thing, devoutly to be wished for and fiercely to be fought for."
-Justin Torres

[Mom to Brandon and 2 cats]

Hmmm...engineering, and this is for a public agency, if that makes any difference. Know if any websites I can go to for research? I know how much the position is worth in benefitted salary, just not sure how to compensate for the lack of benefits.

[holliam]

In my profession, the general rule is to consider how much you would make in a yearly salary and if you are a contractor, charge that equivalent value. I am totally making no sense. LOL

$100k - charge $100/hr
$60k - charge $60/hr

No idea why this is the case, but I know it is, at least for the very good, in demand folks.

Holli

[dhano923]

I was an HR Manager, and our markup for contract employees was 20%. This was in the entertainment industry. I think it'll depend on the field you are in and how in demand the job is. A job that everyone wants will have a lower markup.

[firstbaby]

The cost of beneifts that a company offers an employee typically is worth 20 - 25% so I would plan to mark it up that much. However, if it is a short term contract or you don't have a lot of faith with the stability of the contract, you should be able to negotiate for more...

[dogmom]

20-25% sounds low to me as the cost of employee benefits. I was used to a 40% figure, and it might be higher now given health care costs. First of, they won't be paying their share of Social Security, which is about 7% (you will have to pay that on top of what you already pay!). You don't get holidays, sick days, etc., so figure that out. No health benefits. They don't have to pay unemployment tax or workman's comp fees on you either, is my understanding. (Which you never see, but that means you aren't entitled to those benefits if they let you go or you get hurt.) Go for 40%, settle for a little less, or they will be paying you less for doing the same work. Also, the benefits that you got through your employer, such as health care, were PRE-TAX. If you are going to pay out of pocket for such things, that will come out of your POST-TAX money. So depending on what tax bracket you are in, you might be actually talking about a 50% difference in actual pay.

Here is a good web site for contract employees.
http://www.cehandbook.com/cehandbook/htmlpages/ceh_main.html

Jeanne
Mom to Harvey
1/16/03
& Eve
EDC 6/18/06

[Lovingliv]

I just did this, and I charged 50% more than my hourly wage. I am a dietitian so different field. HTH

[kijip]

Consider not just the cost of benefits but the cost of filing your own taxes. I would say 50% or more is not unreasonable for many fields.

[alkagift]

I think 20-25% is very low. I would say 40. In any case, that's what our business plan figured when it came to actually planning for headcount. I was an HR Manager/Director for 15 years, the last half of that in the consulting industry, FWIW, a bit different.

Allison
Mommy to Matthew, who is TWO!