how to calculate a contractor or consultant hourly rate

How do I Calculate a Contractor Hourly Rate?

Just ask us. we know!

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

Plus get 5 of our most popular documents


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.



position-information-checklist-free-template-download

Click image to view full size

VIEW THIS KIT


So much more than just templates

ConnectsUs  for
SMALL BUSINESS

Create noticeably better HR
for your Small Business

ConnectsUs  for
HR CONSULTANTS

Quick-start your
HR Consulting Practice