IT Web Developer Contract rate?

mathie

Hi,
I've 7-8 years experience in web development.
5 years ASP, VB, Javascript, SQL Sever.
2-3 years ASP.NET, ADO.NET, C#, Javascript, Oracle, SQL Server, Source Control.

what should I be looking at per day if I go out on contract? (I've always been permanent)

Thanks a million.
M

BostonB

When you consider you have to pay for your sick leave, holidays, pension, health cover, re-training costs, equipment, car etc etc. I reckon you need at least 2-3 times a permanent job to make it worthwhile.

pwd

ah but you work as a sole trader you don't have to pay income tax

(joke)

You should be able to get 300 euro a day I think

seamus

There was a good thread on this ages ago about how to work this out, but I can't remember it completely.

Basically, you work out first off how much money you would want per year if you were getting a salary.

Then you factor in PRSI. Then you factor in other expenses which may normally be covered by an employer - pension contributions, etc.

Now you need to work out how much that is per day. There are 365 days in a year. Of them, 104 are weekends. That leaves 261 days.

Take off 21 days for holidays = 240 days
Take off public holidays - 9 days = 231 days
Take five days for sickness = 226 days.

(I may be missing one or two more deductions).

Now divide your total yearly cost by that, and you determine what you need to charge by the day.

So for example, say you want to earn €40k (before income tax) next year.

This means that your gross pay per week is 40/52 = €770/week.

This means you're liable for PRSI. 2% on the first €127, and 6% on the rest. So your PRSI payable per week is €41.12. That's 2138.24 per year.

So let's say then that you're happy with your €40k, you have no other expenses. That means to get that amount, you need to charge €42138.24 per year. Taking our figure of 226 working days, you need to charge €186.45 per working day. Or around €25/hour.

Remember that as a self-employed person, you can claim certain things back on expenses - mileage, stationery, etc. Other items can reduce your income tax bill - computer equipment, vehicles, training etc. But these things still cost money - do it as though you were a business. Imagine that the business needs to buy all of these things for itself, but it also needs to pay you as an employee.

In reality, contract work is unstable so you need to factor that in as well. Let's say you sign a six-month contract. Perhaps it would be prudent to say that when the contract finished, it may take you a month to find more work. So that raises your costs.

I've never worked on a contract basis myself, so someone else may be able to advise better.

rebel.ranter

I employ contractors (not in IT) & I think you would be way under selling yourself at €200 a day. I would agree with the poster who suggests a 2-3 times multiplier of your salary.

pwd

rebel.ranter wrote:

I employ contractors (not in IT) & I think you would be way under selling yourself at €200 a day. I would agree with the poster who suggests a 2-3 times multiplier of your salary.

nobody suggested 200 a day

comer_97

the starting daily rate for web contracting is between 250 and 300, it's not hard to get by on that, even if you set up a limited company.

It all depends what position you are going for. but don't be shy ask for €350 a day if that's what you think you are worth.

pwd

comer_97 wrote:

the starting daily rate for web contracting is between 250 and 300, it's not hard to get by on that, even if you set up a limited company.

It all depends what position you are going for. but don't be shy ask for €350 a day if that's what you think you are worth.

I agree. It's much better to ask for too much than too little. If you ask for too little they'll think there must be something wrong with you.

rebel.ranter

pwd wrote:

nobody suggested 200 a day

Somebody suggested €186, I just rounded up.

Chardee MacDennis

seamus suggested 200 a day (ie 25p/h * 8)

seamus

rebel.ranter wrote:

Somebody suggested €186, I just rounded up.

That wasn't a suggestion, it was just some example figures

€186 per day would be leaving yourself at a huge risk.