Hourly Rate Expectation

Pepe LeFrits

I've been talking to a consultant about a short term IT contract role and they have requested an daily rate expectation. I'm not sure what to come back with really.

I've searched a lot of similar roles and checked with the various salary levels on different websites but I'm still not really clear. I've got a rough idea of what annual salary I'd probably command in a permanent role, but I've seen similar roles advertised on a contract basis where the hourly rates add up to quite a lot more than a permanent rate. Is there generally a difference between the two?

Nody

Big difference.

You got no holidays paid; no perks; no salary if sick etc. Add in the fact you need to pay your social insurance, arrange the book keeping (either as entity or doing your own taxes etc.).

From what I've seen and read (so take this with a grain of salt) a rough idea would be hired salary x2.

seamus

As Nody says, there are much more things to consider when you're self-employed (which is effectively what you are on a daily rate).

Roughly, you need to work out your expected salary after tax and then include any business expenses, which may be mobile phone, internet, stationery, etc

Salary is a bit messy.

Let's say that in PAYE employment, you would expect to earn €50k p.a.

That means that your tax deductions are:
Income Levy: €1,000
Health Levy: €2,000
PAYE: €9,196
PRSI: €1,736

Which leaves you with roughly €36,000 p.a.

When you're self-employed, you lose the PAYE tax credit, which means that you pay additional tax, and the income of a self-employed person on €50k has a take-home of about €34,500.

So to make up the difference, you need to up your salary to about €54k p.a.

(Getting all these calculations from here: http://taxcalc.eu/monthlyss/ )

I would also add a little to that as a buffer - you're not getting the benefits of fixed employment, so you need to protect yourself a little. I would add between 5% and 8%, so we'll say €57k p.a.

Then business expenses, let's say €3k (probably a bit high, but it makes a nice round figure in this example), which gives a final figure of €60,000 p.a.

To convert this into a daily rate, you need to calculate how many days you are going to work in that year. There are 52 weeks in a year, 5 days per week, so 260 days. Take away 21 days for holidays and 9 public holidays, and you have 230 days. Some people will also take 5 or 10 sick days from that, though I think the latter is taking the piss.

So €60,000 divided by 225 working days gives a daily rate of €267.

I could be way off here, but that seems like a reasonable way of calculating it to me.

Welease

The rates will change drastically depending on your skills and experience.. We have paid anywhere between 150 per day to 700..

Give a contract agency a ring, and ask them if you signed up what would be the likely rate you could expect with your skills/experience... That should put you in the ballpark..

3DataModem

Double permy pay is a pretty good ballpark as stated in first response above.

Depends on role; coding a dead language maybe triple, tech support maybe 1.3 times.