How To Determine What You Should Be Paid As A Contractor
Many of us have made the transition from full-time employee to contractor status. For some it was a lifestyle choice while for others it was the only work opportunity available at the time. No matter the situation when faced with considering contractor status we ask ourselves how much do I charge for my services? Here are three points to consider.
You likely have a good idea how much you or others in your field are paid as full-time employees and if you don’t:
- Refer to Glassdoor to determine annual salary in your field, for your position and in your location.
- Next: divide by the annual hours ‘typical’ to a full-time position – 2080. Example: $50,000 / 2,080 = $24 per hour.
- Add any overhead costs that you will incur to accomplish the work. These can include utilities and technology if you work from home and insurance, healthcare, etc if not provided through a third party contracting firm.
- Lastly: Add a profit margin to your formula – typically 10%
So far so good, but some live in areas that are talent competitive and as a result of these market pressures we may not get what we want.
Investigate what your market will bear.
- Again, refer to Glassdoor salary information and see how pay fluctuates
- Ask others in your field
- Ask corporate and independent staffing specialists.
- Call the procurement office of a major employer in your city as they negotiate these prices with third party firms and can give you competitive pricing.
Determine what is right for you.
- What specifically are you working to accomplish? Do you need income or are you working to add value to your career
- How long do you have to do this to accomplish your goals?
- Are you seeking full time employment at the same time?
- Are you afforded the time necessary to interview?
- Can you become a full time employee at the company where you are contracting? Is this what you want?
- Can you see yourself as a contractor full time?
At the end of the day determining what floats your boat based on need and lifestyle has been determining factors in the contractor’s decision making process. And I will say for the third time today, having Glassdoor as a place to begin can be a great help in determining your market value.