If you're a contractor, how do you set your hourly rate?

If you're a contractor, how do you set your hourly rate?

Q: If you're a contractor, how do you set your hourly rate?

A: First off, never ask your recruiter what your hourly rate should be, because they will give you a low rate. Why? Because their interests are very different from yours. They're not on your side. They represent employers, not you.

Two, contract rates are set by end clients. Not by recruiters. And not by contractors.

Three, contract work flows in the feast-or-famine pattern, therefore your hourly rate should be significantly higher than that of perm employees.

Four, how do you set your hourly rate? If you've been contracting for five or more years, your own history of income and expenses can, fairly accurately, establish your hourly rate.

Or, alternatively, you can take the annual salary of a similarly skilled permanent employee, and divide it by one thousand. For example, if your salary is $75,000 per year, then your rate should be $75 per hour. Or, if your salary is $50,000 per year, then your rate should be $50 per hour.

Five, do you think these rates are too high? No, they aren't. They're just wages that no respectable IT firm would ever work for. Additionally, contract work flows in the feast-or-famine pattern. Therefore, you need to charge a rate that is significantly higher than what is charged by similarly skilled, permanent employees.