Tricorp


100% Woman Owned Equal Opportunity Employer

Additional information on Resume Development | Compensation Guidelines to Contracting

Compensation Guidelines for Contracting

As a contractor you are expected to build into your hourly rate compensation for securing your own benefits. The following will suggest how you might build a competitive hourly consulting fee for contracting assignments. By following some basic steps below you may be better equipped to determine a competitive contracting rate for today's market.

STEP ONE: Figure out your annual full time compensation for the last three years and average that figure. Be sure to include bonuses in your annual figures. Full time salaries are based on 2080 hours worked per year. Contracting estimates are based on a range of 1980 to 1950 hours per year and this assumes you will be taking time off for holidays and vacation. Divide your annual averaged income by 1980 hours. This number will give you an hourly rate that takes into account and compensates you for vacation and holiday resulting in no lost wages for these events. In our example we will use a base salary of $50,000 to illustrate this example.

$50,000 divided by 2080 hours = $24.38
$50,000 divided by 1950 hours = $25.64

STEP TWO: Determine what your full time company paid for your healthcare and other benefits. This is typically a cost of approximately 18 to 23% when companies disclose their cost per employee programs. For your purposes, we suggest you use a factor of 25% to assure you can obtain similar benefits. Multiply your hourly rate by 1.25 to compensate yourself for traditional benefits.

$25.64 times 1.25 = $32.05

STEP THREE: Figure out your adjusted Annual Compensation with the new hourly rate and hours.

$32.05 times 1950 hours = $62,497.

Your annual compensation under this program is $12,497 higher than your full time compensation previously. Review your decision about your increased compensation and determine if you can obtain the benefits you require for this increased amount. It is now up to you to determine if contracting is the right choice for you. Some factors that should be considered include the ability to obtain health care or if you have access to a spouse's benefits.

Once complete, if you determine this is a good career option, submit your contracting hourly rate when asked for hourly W2 compensation during our application process. The majority of TRICORP's employees are W2 status. That means that TRICORP will be withholding taxes for your federal and state withholdings and TRICORP will pay statutory taxes on your wages that are required by employers.