What hourly rate should I quote to be an on-site web-development / graphics guy contractor?

August 1, 2008 10:01 AM

What hourly rate should I quote to be an on-site web-development / graphics guy contractor?

I have been running my own free-lance business for a year now after leaving the corporate job role after seventeen years. I decided to re-enter the workforce and received an offer from a company I would love to work for, but... the COO wants me to work as an independent hourly on-site contractor. I don't have a problem with that at all, but I'm having a hard time coming up with an hourly rate to quote.

Some key facts:

My last "real job" salary was $68,000.

My standard contractor rate has been $75 per hour. I estimate the time to complete a project and bill for the entire project.

This looks like it will be a long-term (at least a year, probably more) position.

As a contractor, I would receive no benefits of any sort.

It would, generally, be 40 hours a week for a standard work week, but there will be times when more is expected and needed.

The web work is both design (Photoshop, Illustrator, etc.) and development (PHP, XHTML, SQL, etc.).

There will also be the occasional random graphic task such as postcard design and so on.

Finally, they really, really like and want me. They didn't bat an eye when finding out about my previous salaries.

Any thoughts? Suggestions?

posted by anonymous to work & money (7 comments total)

Depends on the city you're in. I think $75 / hr is about right for a contractor. You have to buy your own benefits, and pay taxes, and they could change their minds and cancel your contract at any moment (so you have to have a cushion... which is all built into your hourly rate).
posted by zpousman at 10:10 AM on August 1, 2008

$100,000 per year sounds about right, since it's a big discount on the $150,000 that your usual short-term rate would be. Make it a one-year contract with payments spaced however you like.
posted by rokusan at 10:10 AM on August 1, 2008

Not that this is the question, but that COO is an idiot, because structuring the relationship this way is asking for an audit. The IRS would definitely consider that situation one of employment, and the company will be liable for any back payroll taxes. You might want to look into your potential liability if this did come out.
posted by miss tea at 10:46 AM on August 1, 2008 [1 favorite]

Not that this is the question, but that COO is an idiot, because structuring the relationship this way is asking for an audit. The IRS would definitely consider that situation one of employment, and the company will be liable for any back payroll taxes. You might want to look into your potential liability if this did come out.

I agree with this.

That aside, $75 sounds a bit low, you're bringing a lot to the table (most places would hire two different people for development and design.) And they "really really want you."

I'd ask for $100 or so and they come down to $90 if they say it's too much.
posted by drjimmy11 at 10:52 AM on August 1, 2008

If you've charged 75 in the past for this sort of work, then ask for 75 or more. You may have opportunities to moonlight, and having two rates at that point can be troublesome. I've been in "mixed economy" situations where I charged different rates for different clients, and I always end up resenting the lower-rate jobs, as if I'm doing them a favor / working for friends, which is good for no one.
posted by condour75 at 10:55 AM on August 1, 2008

Definitely not lower than $75. Especially if you're good at it. That's a very competitive rate in our industry and, if you haven't noticed, in the past year and a half the demand in the web design & development industry has gone through the roof. Employers are having a hell of a time finding good help. That's why they aren't flinching. It's rapidly becoming a high five/low six figure job, if it's not there already.
posted by BirdD0g at 10:59 AM on August 1, 2008

Not that this is the question, but that COO is an idiot, because structuring the relationship this way is asking for an audit. The IRS would definitely consider that situation one of employment, and the company will be liable for any back payroll taxes. You might want to look into your potential liability if this did come out.

I also agree with this. The laws and rules about contractor vs. employee don't hinge exclusively on the agreement between the parties. Factors such as direction of work, ownership of equipment, location, and other work you do will affect the characterization of your relationship.

I'd factor this risk into your wage fee - adding a hefty premium.
posted by GPF at 6:59 PM on August 1, 2008