this post was submitted on 17 Jun 2023
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Negotiating a rate for contract work? (programming.dev)
submitted 1 year ago* (last edited 1 year ago) by sunshine12873@programming.dev to c/experienced_devs@programming.dev
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I am considering taking a contract software engineering role with a company I am excited about. We are in the final stages of the interview process, and they are pressuring me for a rate. When they first asked me for a rate, I asked whether they have a typical rate that they pay contractors and they said yes, "based on experience", but did not disclose the rate. I have no idea how they are intending to level me and am confused as to why they are asking me for my rate if they have a standard contractor rate. Would welcome any advice about how to proceed.

Edit: to clarify, I'd like help with how to ask them to tell me their usual contractor rate

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[–] samus7070@programming.dev 3 points 1 year ago

Here’s a formula I have used. You have a certain target amount of money that you need/want to make per year. Now remember that you will need to pay taxes and other expenses such as health insurance (in the US) from that number and bump it up accordingly. Let’s call that T. Now there are 52 weeks in the year and the average work week is 40 hours so 2080 possible hours to work. From that number take out holidays, vacation and and an estimated amount of sick time. The average US corp has 10 holidays that they won’t expect to pay you for so the total hours should be no more than 2000. Now simply take T/hours and that is your starting rate. If the contract is 6 months or more and likely to get extended use that number. If it’s contract to hire use that number and remember that your FTE rate will be less than your contract rate. If the contract is short term or has some instability bump up the rate enough to at least partially cover some down time while you’re looking for the next gig.