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.
First, as Matt said, talk to an accountant. I have done that - they'll often talk to you for free because of the potential to get your business. That said, here's a few things to consider based on my experience.
To be clear - my 10% rule of thumb was for W2. W2 is much less work (and has less liability potential) than 1099 and Corp-to-Corp (e.g. S-Corp). If you go the independent route then add another 10-15% (minimum). As an independent you pay your own Social Security (~7%). Keep in mind that, on W2, the company that contracts you out gets about double what you get as a W2 contractor. E.g. If you're getting $60/hour, the company is paying roughly $120/hour for your services. I have signed many contractor invoices, I know.
Next, and this is huge, many people refer to corp-to-corp as 1099 but it's not the same thing. (FYI - when I was on my own I did so as an S-Corp). Most Corp-to-Corp people set themselves up as S-Corps (roughly $500 to setup in accounting fees/paperwork). In my experience many more companies prefer S-Corp to 1099. This for a number of reasons the most notably reason being, IMHO, the IRS sometimes declares 1099 workers are employees then things get more complicated than both parties want.
Here's a great article I used before going out on my own that you might find useful: Consultants: W-2, 1099 or Corp-to-Corp?
The one thing I disagree with in this article is: If you have health insurance through your company and like it, DONT get COBRA for your health insurance. Go another route. I made this mistake only to discover that COBRA is now part of ObamaCare which means you'll pay like $400+ and get a much crappier and more expensive version of your employer provided health care policy.
I went the S-Corp route after a tech recruiter/friend advised me to. It's more work but not too much more. Some companies pay you every 30 days which takes some getting used to but it's a big one. The best benefit is the tax benefits. A good accountant will help you exploit that.
"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