Salary vs contract rate?

  • SeattleDBA

    Ten Centuries

    Points: 1019

    For the first time in many years, I am considering a longer term contract. I was on a contract to hire, but there is now a hiring freeze and they have asked me to extend the contract until the freeze is lifted. Prior to this I have only been on FTE salary for the past 10 years at previous two jobs.

    So what rate per hour is appropriate? I think I took too low of a contract rate per hour the past few months, but I just didn't rock the boat because the plan was to go FTE.

    If the FTE salary for my area is $130,000 to $140,000 for a senior level DBA, that would be about $65 (W2) per hour based on 2,000 hours per year. But there is no bonus or paid vacation or other benefits with that $65 per hour.

    So what sort of additional markup is typical when I request a specific rate per hour for being on a contract instead of on a salary with benefits? I realize this is different for everyone based on location, experience, etc. I am seeking advice on what is the typical percentage above equivalent salary?

    If $130,000 salary = $65 per hour, should I be asking for $75 per hour ($150,000 based on 2,000 hours per year) to make up for the lack of bonus or health care or other benefits? Should I be asking for $85? What number would be reasonable and not out of question?

    I have already impressed them by solving several severe issues they had in a critical database. The group manager doesn't want to lose me. They had problems for two years before I arrived and I solved it in two weeks. They want to keep me long term, but the company is in a hiring freeze. So a contract is available until their hiring freeze is lifted. I have the ability to renegotiate this now. I was originally brought in on a contract to hire, but then the hiring freeze happened due to the company missing it's earnings number.

    Any advice would be appreciated. Thanks

  • Jeff Moden

    SSC Guru

    Points: 996661

    I'm obviously living in the wrong part of the country (although I do have benefits, paid vacations, flexible hours, ability to work from home, and live close enough to work to be able to ride a unicycle there without getting chaff marks).

    --Jeff Moden


    RBAR is pronounced "ree-bar" and is a "Modenism" for Row-By-Agonizing-Row.
    First step towards the paradigm shift of writing Set Based code:
    ________Stop thinking about what you want to do to a ROW... think, instead, of what you want to do to a COLUMN.
    "Change is inevitable... change for the better is not".
    "If "pre-optimization" is the root of all evil, then what does the resulting no optimization lead to?"

    Helpful Links:
    How to post code problems
    How to Post Performance Problems
    Create a Tally Function (fnTally)

  • JamesMorrison

    Hall of Fame

    Points: 3213

    I would say it should be about 20% more. Just my guess. I would like to hear other opinions on this.

  • Jeff Moden

    SSC Guru

    Points: 996661

    JamesMorrison (12/26/2015)


    I would say it should be about 20% more. Just my guess. I would like to hear other opinions on this.

    Instead of relying on us amateurs, the absolute best thing to do would be to consult with a CPA. They know the ins and outs of this type of question better than anyone else.

    Of course, "It Depends" on other things, as well. For example, do you know how to get the current date and time using T-SQL?

    --Jeff Moden


    RBAR is pronounced "ree-bar" and is a "Modenism" for Row-By-Agonizing-Row.
    First step towards the paradigm shift of writing Set Based code:
    ________Stop thinking about what you want to do to a ROW... think, instead, of what you want to do to a COLUMN.
    "Change is inevitable... change for the better is not".
    "If "pre-optimization" is the root of all evil, then what does the resulting no optimization lead to?"

    Helpful Links:
    How to post code problems
    How to Post Performance Problems
    Create a Tally Function (fnTally)

  • Eirikur Eiriksson

    SSC Guru

    Points: 182438

    Jeff Moden (12/26/2015)


    I'm obviously living in the wrong part of the country (although I do have benefits, paid vacations, flexible hours, ability to work from home, and live close enough to work to be able to ride a unicycle there without getting chaff marks).

    I would just love to see that, can you do any tricks on the unicycle such as jumps and hairpins:-D

    😎

  • Jeff Moden

    SSC Guru

    Points: 996661

    Eirikur Eiriksson (12/26/2015)


    Jeff Moden (12/26/2015)


    I'm obviously living in the wrong part of the country (although I do have benefits, paid vacations, flexible hours, ability to work from home, and live close enough to work to be able to ride a unicycle there without getting chaff marks).

    I would just love to see that, can you do any tricks on the unicycle such as jumps and hairpins:-D

    😎

    As difficult it is to understand, I can "pop a wheelie" on it. Since I've put on some weight, the seat might get stuck if I try that now. πŸ˜› I used to be able to not only ride down a short stairway (3 or 4 stairs), I used to be able to hop up the stairs. When I was younger, several of us in the neighborhood used to play basketball on our unicycles and we could pick up the ball off the ground without getting off the unicycles (we got the "no-belly" award for that ;-). We also played a special game where we'd play "two man" basketball. That's where one guy would ride the unicycle and another would be riding on his shoulders. The "slam dunks" were incredible. So were the crashes and involuntary dismounts. We used to also have races on pond ice in the winter time. Heh... like all kids, we "knew" we were indestructible and set out every day to prove it. Now I'm happy just to be able to get on it without blowing out a tire or racking my shins on the pedal when trying to get on or off it.

    --Jeff Moden


    RBAR is pronounced "ree-bar" and is a "Modenism" for Row-By-Agonizing-Row.
    First step towards the paradigm shift of writing Set Based code:
    ________Stop thinking about what you want to do to a ROW... think, instead, of what you want to do to a COLUMN.
    "Change is inevitable... change for the better is not".
    "If "pre-optimization" is the root of all evil, then what does the resulting no optimization lead to?"

    Helpful Links:
    How to post code problems
    How to Post Performance Problems
    Create a Tally Function (fnTally)

  • Matt Miller (4)

    SSC Guru

    Points: 124208

    20% is probably a bit light. Since you would now be self-employed, you're going to have to pay the 6.75% to medicare and Medicaid your employer used to be paying for; you're probably also going to want to pick up some E&O insurance (unless you don't mind gambling your house on it). THEN your benefits, 401k contributions, healthcare, time off, etc...

    But still - Jeff's right - best off talking to a CPA about it. I'd look for one that understands the intricacies around self-employment (not all of them do). First visit is often free, but even if it isn't - would be well worth your investment (if nothing else to learn the paperwork and tax stuff you haven't had to deal with before).

    ----------------------------------------------------------------------------------
    Your lack of planning does not constitute an emergency on my part...unless you're my manager...or a director and above...or a really loud-spoken end-user..All right - what was my emergency again?

  • Eirikur Eiriksson

    SSC Guru

    Points: 182438

    Jeff Moden (12/27/2015)


    Eirikur Eiriksson (12/26/2015)


    Jeff Moden (12/26/2015)


    I'm obviously living in the wrong part of the country (although I do have benefits, paid vacations, flexible hours, ability to work from home, and live close enough to work to be able to ride a unicycle there without getting chaff marks).

    I would just love to see that, can you do any tricks on the unicycle such as jumps and hairpins:-D

    😎

    As difficult it is to understand, I can "pop a wheelie" on it. Since I've put on some weight, the seat might get stuck if I try that now. πŸ˜› I used to be able to not only ride down a short stairway (3 or 4 stairs), I used to be able to hop up the stairs. When I was younger, several of us in the neighborhood used to play basketball on our unicycles and we could pick up the ball off the ground without getting off the unicycles (we got the "no-belly" award for that ;-). We also played a special game where we'd play "two man" basketball. That's where one guy would ride the unicycle and another would be riding on his shoulders. The "slam dunks" were incredible. So were the crashes and involuntary dismounts. We used to also have races on pond ice in the winter time. Heh... like all kids, we "knew" we were indestructible and set out every day to prove it. Now I'm happy just to be able to get on it without blowing out a tire or racking my shins on the pedal when trying to get on or off it.

    We are all getting wiser...

    😎

    My version of "Pop a wheelie" would be more like this

  • Jeff Moden

    SSC Guru

    Points: 996661

    BWAAAA-HAAA!!! To0 funny! But, Nah... a "wheelie" on a unicycle is the hop you need to do to go up the stairs.

    --Jeff Moden


    RBAR is pronounced "ree-bar" and is a "Modenism" for Row-By-Agonizing-Row.
    First step towards the paradigm shift of writing Set Based code:
    ________Stop thinking about what you want to do to a ROW... think, instead, of what you want to do to a COLUMN.
    "Change is inevitable... change for the better is not".
    "If "pre-optimization" is the root of all evil, then what does the resulting no optimization lead to?"

    Helpful Links:
    How to post code problems
    How to Post Performance Problems
    Create a Tally Function (fnTally)

  • Eric M Russell

    SSC Guru

    Points: 125089

    To balance out the concerns regarding taxes and health insurance, consider a long term contract ostensibly means less time sitting on the bench between gigs. For that reason, your rate on a long term 1090 contract can be understandably lower than what you would want to charge on a series of short term 1090 contracts, but by all means consult a CPA for a reality check.

    However, you'll also need to guage how solid the opportunity is. In the startup world, there may not be such a thing as a "long term contract" for a DBA.

    "Do not seek to follow in the footsteps of the wise. Instead, seek what they sought." - Matsuo Basho

  • Wayne West

    SSC-Insane

    Points: 22586

    The last time I did a temp consulting gig in Phoenix, some 15 years ago, I was paid $120 an hour because when I left, the system continued to work correctly. They paid other consultants more, and things failed when they weren't there.

    Definitely talk to a CPA, they can tell you what your tax obligations will be. Since you'll also have to carry health insurance, unless your spouse carries it, you have that also. And don't forget about retirement. I would try to get the company that wants you to give you a breakdown of what their benefits are so you can see what their costs and what your costs would be, it will give you a better idea as to what things cost.

    Are you going to be working full time? Is it telecommuting or on-site? Do you have on-call responsibilities? I have no idea how you would factor in sick/vacation leave.

    It's very important to get things clarified as there are legal definitions as to what is an employee and what is a consultant or contract worker, and there can be trouble if those definitions are violated. And as I don't know precisely what those definitions are, I'm not going to speculate about my half-baked knowledge.

    -----
    [font="Arial"]Knowledge is of two kinds. We know a subject ourselves or we know where we can find information upon it. --Samuel Johnson[/font]

  • Alan Burstein

    SSC Guru

    Points: 61079

    If the FTE salary for my area is $130,000 to $140,000 for a senior level DBA, that would be about $65 (W2) per hour based on 2,000 hours per year. But there is no bonus or paid vacation or other benefits with that $65 per hour.

    The rule of thumb based on my experience is that companies will pay 10% more than the salary in hourly wages. That would be ~$70-75/hour. I have friends right now that are getting 15%-20% higher for the contract rate because the market is good at the moment. I'd be asking for $75/hour at a minimum.

    "I cant stress enough the importance of switching from a sequential files mindset to set-based thinking. After you make the switch, you can spend your time tuning and optimizing your queries instead of maintaining lengthy, poor-performing code."

    -- Itzik Ben-Gan 2001

  • SeattleDBA

    Ten Centuries

    Points: 1019

    Jeff Moden (12/26/2015)


    I'm obviously living in the wrong part of the country

    That surprises me. I realize that Seattle is a bit higher COL, but my resume has job history from two states in the southeast where COL is lower. So I still get calls from those areas also and I inquire what they are offering.

    The rates and salaries in North Carolina and Georgia seem to be quite good for low COL areas. $100,000+ seems common before even starting to negotiate.

    I consider Georgia and North Carolina to be cheaper areas of the USA to live. So if they are paying $100,000+ in the low COL areas, then I would guess that is standard these days for an experienced DBA just about everywhere.

  • SeattleDBA

    Ten Centuries

    Points: 1019

    Alan.B (1/4/2016)


    If the FTE salary for my area is $130,000 to $140,000 for a senior level DBA, that would be about $65 (W2) per hour based on 2,000 hours per year. But there is no bonus or paid vacation or other benefits with that $65 per hour.

    The rule of thumb based on my experience is that companies will pay 10% more than the salary in hourly wages. That would be ~$70-75/hour. I have friends right now that are getting 15%-20% higher for the contract rate because the market is good at the moment. I'd be asking for $75/hour at a minimum.

    Thank you for the response. That matches about what I have figured out since the original posting. Something I didn't mention in the original post was that I am referring to contracts while on W2. Some of the response I think were answering for Corp to Corp rates, with the added taxes I guess.

  • ChrisM@Work

    SSC Guru

    Points: 186107

    Jeff Moden (12/27/2015)


    BWAAAA-HAAA!!! To0 funny! But, Nah... a "wheelie" on a unicycle is the hop you need to do to go up the stairs.

    How do you...blimey Jeff, I would never have thunk it. Someone close to me shares your enthusiasm for this daft niche sport:

    http://www.unicycle.uk.com/blog/parys-mountain-muni/[/url]

    http://www.unicycle.uk.com/blog/manchester-to-blackpool-by-matthew-morris/[/url]

    http://www.unicycle.uk.com/blog/matthew-morris-incredible-101-1-miles/[/url]

    You wouldn't get me on one of these contraptions for a day's worth of Kevin Boles' rate.

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