Hourly

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waitingforaos

Registered Users (C)
I know this is not a topic to be discussed on this forum but any help will be greatly appreciated.
I am planning on going hourly through my current employer(am salaried right now, but get paid for the number of hours worked along with all the benefits)
Can anybody tell me how do I negotiate my hourly rate. I know I will not get vacation nor get paid on holidays, but what about medical benefits. Does it matter if I get medical benefits from them or on my own

Thanks for your reponses- in advance
 
Well, as a rule of thumb, u will have 2000 working hrs in a year. So ask for a rate which will let u have a good standard life.

Generally, u wont get vacation.

If u don't get hlth insurance then based on the provider and the plan, try to find out the cost. Check the web for more info.
 
Thanks Priya , But....

I thought the hours would be 1920 instead of 2080, that would be 80 hours that is 10 days of vacation and 80 hours that is 10 days of national holidays. So we got to substract 160 from 2080.
Also, how much % of the rate the client is giving should I get if I just get medical benefits from the company
 
i can give you some advise

Please be very careful when asking for hourly. You have to do a lot of homework and calculations.


Total No of hours in a year = 52wks * 40 = 2080
No of Govt.Hols = 10 * 8 = 80 hours


Say, you assume 15 days vac(incl sick leave) = 15 * 8 = 120 hours.
So, No of hours billable = 2080 - (80+120) = 1880.

Medical will be approx $5000/annum
401K + other benefits will be another $5000/annum.

Assume, you are earning $70000/annum, now(just an assumption)

Now the total cost for the employer = 70000 + (200hrs vac) + 5000 + 5000 = 80,000 + 200 hrs(vac)


Divide it by 1880,
$80000/1880 = 42.5/hour (which does not include vac)

Now, for the vac,
200 hrs * 42.5 = $8500
Adding it to total cost = 80000 + 8500 = 90000(rounding off)

90000/1880 = $47.8/hr (approx $50/hr)

So, you can ask for $50/hour. This is very reasonable. My calculations are very aproximate figures.

Hope this helps
 
Let's see.

52 weeks @ 40 hrs = 2040 hrs
Holidays (10 days @ 8 hrs) = 80 hrs
Vacation/sick/misc off days (20 * 8 hrs) = 160 hrs
(misc off days: quite a few cos. closed Xmas thru new yr in 2002)

So, 2040 - (80+160) = 1800 hrs.

This is a reasonable assumption and if you end working more consider it a bonus (which always helps to offset any surprise expenses).

As for insurance, depending on your willingness on deductibles/coverage you may pay anywhere from 5K to 15K if you elect on your own. So, assuming 10K if you bought your own insurance, compare to see how much you will lose (reduction in rate + insurance contribution) if you elect employer's insurance. If rate loss < $5, opt employer's else buy your own.

Good Luck.

p.s.: FYI, you would not pay social security taxes for gross exceeding $85K.
 
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usually its 30-40% of the base salary you want to have. If you could be travelling, include the travel cost to it too. 1099.com or that kind of sites gives you the formula in details...
 
Bench

If your current employer pays you on bench, you need to consider that too while negotiating.
 
I gave an approx number for the working hrs(~2K). Anyway, it seems that there are people who have done more research on this.

I learn't something new today..

I had another question:

Why is 401K benefits included as part of calculation? Why would it cost them ~5K, if they don't do any matching.

Also abt health insurance, does it cost anywhere from 5 - 15 K. I have been a Full timer all my life atleast till now, so am a bit surprised on that front since I thought that for a decent deductables u could get insurance from 2K - 5K.

Anybody out there paying 10K - 15K/yr on htlh insurance?
 
Originally posted by priyagc
I gave an approx number for the working hrs(~2K). Anyway, it seems that there are people who have done more research on this.

I learn't something new today..

I had another question:

Why is 401K benefits included as part of calculation? Why would it cost them ~5K, if they don't do any matching.

Also abt health insurance, does it cost anywhere from 5 - 15 K. I have been a Full timer all my life atleast till now, so am a bit surprised on that front since I thought that for a decent deductables u could get insurance from 2K - 5K.

Anybody out there paying 10K - 15K/yr on htlh insurance?
Click to expand...

Regarding health insurance, you pay 20% and the employer pays 80%. So, if they deduct $60 from your paycheck, the employer pays 60*4 = $240 for you. So, this is a benefit which you should consider when asking hourly.
Regarding 401K, if the employer doesn't contribute, then you shouldn't take that into consideration when asking hourly.
If you don't have insurance(even from the spouse), a good health insurance(similar to the one which employer provides) will be very expensive. So, it is better at least one family member gets the health insurance from employer.
 
priyagc:

Companies get group insurance rates. When I mentioned the range 5K-15K, it depends on single, married or family status and also the coverage/dedcutibles/co-pay, etc. elected. On average when accepting employer's insurance, an employee contibutes $200 pm (covers health/dental/possibly vision for family) which is about 25%. The employer contributes the remaining 75% which is about $600 pm. So, that is 800 *12 = 9.6K. These kind of group insurances normally have $10 co-pays. If you went on your own, it would cost you far more to get similar coverage.

When younger and if healthier, one could opt for higher co-pays/deductibles and get insurance at a lower cost. But if one i nthe family is illness prone and more aged, better to opt lesser deductibles. This would easily result a 1K pm insurance. Obviously, if single your rates would be lesser.

FYI, some states also provide pretty inexpensive insurance coverage for kids and also extend it to the family (based on income limits). As for CT, check http://www.huskyhealth.com
The Husky plan is comaparatively cheaper even if one falls in the higher income limits.
 
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Do not forget the 7.5 % social security that your company pays on your behalf! Now, as an independent consultant, you will be responsible for the entire 15%
 
amitgreen

Thanks for the update.
Can you send me the name of your insurance company. Also, I am single so how much do you think I will have to pay for medical and dental. I am not interested in vision.
Sounds like you are working hourly too. Can you send me details of what needs to be taken into consideration, other then what everybody has mentioned

Eg - 15% Social security

What about life insurance. Other then the medical expense what else will I have to pay from my pocket


Thanks for the update
 
Social Security

prajaram,

Is that a rule that employer pays 7.5 when you are an employee and you pay 15% when u r consultant or this could vary and you are just giving these figures as an example?

THanks for your reply,

BR
 
Originally posted by amitGreen
I am paying $180/wk for family thats 9,360
Click to expand...

Its seems the hlth insurance is damn coslty here. Are there community hostipals network were one can go incase u don't have health insurance.

I was told that there was no cost for visiting community hospitals? Maybe not, based on the amount it costs to get hlth insurance.

Did anybody checkout http://www.nase.org/. One of my friend mentioned this site for good hlth insurance plan.

Now coming to the meat of the question, if u pay 10K on hlth and u'r an independent consultant. How do u save money for retirement. Is everybody out here making 100$/hr or what? I have heard nowadays, a 50-60$/hr rate is very high for a decent
experienced(5-7 yrs) IT pros. So what r people doing. Sticking with full-time job? Man, I thought one can save a lot of money becoming an independent consultant.
 
BladeRunner,

The 15% (15.30 actually) I quoted is for both Social Security and Medicare. Sorry for the wrong information.

If you are employed by someone else, then your contribution (7.65%) is collected, then matched by the employer and submitted to the SSA. But, if you are self-employed (independent consultant comes under the self-employed category, I believe), then you end-up paying the entire 15.30%.

Of the 7.65%, Social Security portion is 6.2%; the remainder is Medicare (1.45%).

The Social Security is taxed on your earnings until approx. $87,000. There is no ceiling for Medicare, as I understand it.

Check this site out ...
http://www.ssa.gov/pubs/10006.html
http://www.ssa.gov/OACT/ProgData/taxRates.html

-Palaniappan Rajaram
 
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