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Actually there are a few reasons why consultants often get more than that per
hour.
1. They take on a much greater risk to their income by being consultants.
It is very easy to go from over $50/hr. to nothing.
2. They are required to be able to do things that there aren't enough
employees to do. This can mean a considerable amount of training time and
expense.
3. They have to pay for any and all benefits they get. This includes the
7.75% social security tax that your employer pays. This includes all HMO or
hospitalization premiums. This includes all workers compensation, life,
liability, and other kinds of insurance. Business owner employees are REQUIRED
to pay into the unemployment compensation funds, but are NOT allowed to take
any benefits from it.
4. Pennsylvania has wanted about $300 per year minimum from corporations
just to get started. New Jersey is close at $280. And it doesn't matter
whether you are incorporated in Delaware, each state in which you do business
wants its cut. On top of that a corporation is frequently expected to carry
business insurance ($500-$600 minimum). Errors and omissions insurance can be
$1000-$2000. Accounting fees can easily hover around $1000.
5. If the consultants are brokered the broker takes a percentage that the
client pays and that the consultant never sees. (Typically this is a 20-40%
markup.)
You can't take the hourly rate billed to the client, multiply it by 2000
hours/year, and get an annual salary equivalent. It just doesn't work that
way. Most clients understand this.
I have to be careful or I'll talk myself out of consulting.
Bill Patterson
gabriel rosenkoetter wrote:
> On Sat, Dec 28, 2002 at 11:51:31PM -0500, Mike Leone wrote:
> > That $50 an hr almost certainly is not a salaried rate, Gabe. Most likely
> > consultant fee. And that's not high, for consultants.
>
> Oh, I understood what it was. And it's being not high for
> consultants is only that much more ridiculous. :^>
>
> --
> gabriel rosenkoetter
> gr@eclipsed.net
>
> ------------------------------------------------------------------------
> Part 1.2Type: application/pgp-signature
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