We can answer any question you have about the interview process, including what hourly rates you should ask for.Wage Calculator This salary calculator will help you budget what you earn. Since 1998, we have served the needs of our clients and talent by matching the best candidates with the best companies across the country. Profiles is a unique staffing firm that specializes in marketing, creative and technology employment. However, the right hourly wage calculator can clear things up significantly. The breakdown of hourly pay can be somewhat convoluted, especially when faced with a 1099 form. Now that you understand how to calculate take-home pay, you should have no trouble when asked how much you should earn. However, when you plug in the numbers, the equation practically solves itself. If you’re a right-brained individual who is put off by numbers, this hourly wage calculator system might throw you off. Instead hesitating after an employer’s question regarding wages, you can come equipped with numbers and data. Using this formula can help you calculate your financial needs and increase the quality of the conversations you’ll have with your hiring manager. However, contract workers who receive 1099s do not have income taxes taken from their paychecks and therefore owe taxes on their earnings. Workers with W-2s typically have a lower take-home pay because taxes come directly out of their paychecks. The major reason the hourly wage of someone who is dealing with a 1099 form is higher than someone with the same salary with a W-2 form is due to economic conditions related to taxes. In this instance, with the burden considered, the employee’s hourly rate would be $46.15. We’ll use the same $80,000 example as shown above. Let’s say this company spends approximately 20% of a worker’s earnings on health insurance, benefits and other components that can be categorized as burdens. (Full-time salary + burden) / 2,080 = contract hourly rate Calculate Your Pay If an employee makes $80,000, the hourly rate is $38.46 per hour.įor a long-term contract on 1099 status, the calculations are a little different. For a long-term contract on W-2 status with a workweek of 40 hours, the calculations go as follows:įull-time annual salary / 2,080 = contract hourly rate The exact equation they use depends on the type of tax form they have, either W-2 or 1099. Workers can determine their hourly rates with two approaches. Now that we’ve covered the basics, let’s move on to the good stuff. You can find the number of hours worked by doing this simple math:ĥ2 weeks in a year x 40 hours per week = 2,080 hours This figure represents the number of hours a worker is paid in a calendar year. Ultimately, to calculate how much you should ask for during a job interview for a contract position you just need one number. A burden could contain payroll, taxes, unemployment and other related costs. A W-2 is intended for employees, while a 1099 is the document necessary for independent contractors.Ī common word we use in the recruiting world is ‘burden,’ which refers to the cost a company incurs to employ a person. The main distinguishing factor is whom these documents are meant for. Both documents help you determine the amount of income taxes you’ll pay. If you’ve worked in an hourly position, you might be familiar with some, if not all, of these terms, as they are common expressions used in contract work.įirst, let’s get into the differences between a W-2 and a 1099 form. Running Through the Basicsīefore reviewing the exact formula that recruiters and businesses use when working with contract and freelance workers, ensure you have the basic information needed. Understanding this formula can help you adjust your financial perceptions, so you know exactly what to ask for when you step into the job interview. There’s a simple formula that companies use to calculate freelance and contract worker s’ hourly rates. But when it comes to your earnings, it pays to be strategic and precise. An educated guess might suffice in certain financial transactions in your life. You don’t want to present a lowball offer but asking for too large a sum can ruin your chances of securing the job. However, there’s one tricky part of the interview process for those interested in contract or freelance opportunities: figuring out how much money you should ask for. You might feel empowered to grow in your line of work and build up experience that can propel you further in your career. There’s the anticipation of change - a new office, a different set of responsibilities and a new team. Interviewing for a new job can be exciting. An update to the original article written.
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