Wednesday, 19 January 2011

Contracting Rates

This is a quote to a reply from a forum on

What your rate has to cover.

1. Expenses, Insurances, rent, phones, internet etc. allow 7%
2. GST 10%
3. Super 8%

So @ $50/hr you'll get $40

4. Holidays 8% (approx 4 weeks)
5. Sick leave 4% (approx 2 weeks)

So @ $40/hr you'll get $35 (approx)

6. Downtime, you won't always have 40 chargeable hrs a week, 25% (very very optomistic)

So @ $35/hr you'll get $28/hr

PS ::

I charge a staggered rate depending on the number of hrs the job will take me.

Since I'm only a programmer I can only base it on my experience.

1-4hrs $150/hr
1 day $950 (magically less than $1000)
1-2 week $100/hr
2-4 weeks $90
1-3 months $75
3-6 months $65
6 months > $60

Contracts > 1 month
All rates are calculated on a base 37.5hr week, with a minimum 30hr week, if I work less due to no workload it still costs them 30hrs.

If they wish to exit the contract early it is a 2 week (37.5hr) exit payment.

If they wish to extend the contract at the current rate of the contract, it is run with 2 weekly increments @ (37.5hrs), if the project finishes within that period then payment of the full 2 weeks is still required.

Contract periods are based on lots of 37.5, public holidays extend the period and aren't charged (obviously), and any sick or lost days are to be made up if possible (some facilities don't allow it) or contact extended by those days.

Some contracts have deliveries and milestones, avoid these unless you are happy with the specification of the job, do not allow any changes to the specification without reviewing the deadline. If they want penalties for lateness, insist on bonuses for early delivery, and make sure that their is mutually agreed QA and acceptance.

Payment, bill weekly and allow 1 week for payment, non-payment is considered termination of contract and all termination payments required also within 7 days of termination. DON'T dilly dally with companies about money, be up front and don't get pushed around, too many companies prey on peoples inability to have a spine where money is concerned and shaft plenty.

Pay a lawyer to draw up a contract on big jobs, bill the customer for it, and have a generic one draw up for smaller jobs.

Good luck.

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