<p>What are the going rates these days for contractors? Say for a book keeper, or an accountant, or a programmer, or a business consultant working from home in the major metropolitan areas (NYC, SF, LA, Miami, etc.).? Friend wants to start back to work but would like to do so on a contract basis. Hourly rates? Weekly rates? Is there a rule of thumb? Back in the 80’s I recall the consultant rate was $100 per hour on average. Thoughts?</p>
<p>Sooooooooooo many variables . . . .</p>
<p>Of course the right rate is to charge whatever the market will bear. But that can be hard to discover. One rule of thumb I remember is that for a consultant to be doing about as well as an employee in the same profession they should charge 1/1000 th of their annual salary as their hourly rate. So if you would expect to make a salary of $60,000 per year, you should charge $60/hr. The logic is that although there are about 2,000 hours in a working year (allowing for holidays, vacation, etc.), no one besides a lawyer can bill 2,000 hours per year, plus there are the extra expenses for being a self employed consultant, like self employment tax, office expenses, etc. But only the market test will tell if this rule of thumb is achievable in the real world.</p>
<p>Big difference between a bookkeeper and a consultant. One way to get a start and an idea is to contact some smaller firms in the area and become a subcontrator to them. You can get a feel for the rates for the skills and experience. I started that way and now my consulting fees are way more than $100 per hour. Also no way you will work 2000 hours and the costs include funding your own retirement, paying the enitre social security and medicare for both employer and emplyee shares, and capital investments in the tools needed to perform the job.</p>
<p>Appreciate the guidance, folks. Working backwards from a decent annual salary while making sure to add in benefits’ costs seems like a great first step, assuming the skills match the salary expectations. Then double checking with local small firms re/ their subcontractor rates to get a feel for the market to see if your calculated hourly rate is in the local market’s ball park … ok thank you, I think we have a basic methodology. Sound about right?</p>