What factors should I consider in setting my hourly rate as a 3rd party consultant?
I’ve been offered an opportunity for a good, short-term (60–90 day) contract through a third party that does not provide benefits. What factors should I consider in order to set a rate comparable to an equivalent salary?
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Figure out what annual salary you’d get for the position if you were a full-time employee. Divide that by 2000 to find the hourly rate for the salaried position, then double it to take into account the missing benefits. That’s the ballpark you should be looking in.
Then you want to modify that up or down—if it’s telecommuting, you can afford to modify it down because you’re going to have more time and less expense. (If you’re telecommuting from an area with a low cost of living to an area with a high cost of living, you might split the difference in salaries – the company will get a deal because they’re paying less for you than they would for someone local, and you’ll get a deal because you’re making more than you would somewhere local.)
Then express that you’re looking for 75%-125% of that number and see where they counteroffer.
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