how to calculate a contractor or consultant hourly rate

How do I Calculate a Contractor Hourly Rate?

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Contractor Rate Calculation Form

How do I calculate a contractor's rate?  This is a question that has been frequently asked and usually not answered appropriately without the availability of a tool to defend or negotiate a rate to pay a contractor that actually makes sense.  

Enter the ConnectsUs Contractor Rate Calculation Spreadsheet.  It's a spreadsheet used to calculate an hourly rate for an independent contractor, based on fair market value for an equivalent, regular, full-time position. It will be an eye opener!

Preview & Download it

Negotiating a fair and defendable hourly rate for an independent contractor has always been an undertaking shrouded with mystery and cryptic ambiguity.  As HR professionals or hiring managers, we often settle on a rate simply because there's no tangible science or formula we can refer to.  The variance in rate for the same work can span 200% from one independent contractor or consultant to another.  Contractors often communicate their rates based on their requirements rather than a fair market calculation for that work. 

One way to determine a contractor rate is to understand what that individual would be paid in a similar full-time regular position and reverse-engineer the hourly rate. 

Once this ConnectsUs document has been modified for your company, it will be used by:

  • HR and/or Finance, who will collaborate with the Hiring Manager to complete the details for each contractor position.

Why use a Contractor Rate Calculation Spreadsheet?

It ensures that your company:

  • Compensates all contractors at a rate that is comparable to market value.
  • Factors in all expenses that affect a contractor's rate - both from the contractor's side and the company's side.
  • Can justify your contractor compensation rates.

What you risk by not using it

  • You may end up paying contractors an inflated rate.

  • You may offer a rate that is below market value and risk losing strong contractor candidates.

Can I preview it?

You bet.  
Click on the blue text link(s) below

Contractor Rate Calculation Form  |  Accompanying Instructions for Managers

Download it for FREE!
Limited Time Bonus.  Get an additional 5 of our most popular HR Templates for free!

Which HR kit is it included in?

The Contractor Rate Calculation Form can be used on its own as a stand-alone tool, or as part of the Compensation Kit.

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