Ask HN: Generalist contractors, what is your hourly rate?
In Australia, the most common scenario is a &quot;contractor&quot; being a borrowed casual employee from a labour hire company and the worker gets paid per hour worked whilst being able to work 40 hours per week until the end of a project (typical durations being between 1 to 3 years). This is generally a better arrangement than being a permanent employee because:<p>1. Your leave (that most people can never use as they aren&#x27;t sick enough or aren&#x27;t going to wait around 7 years for long service leave) is paid as you go and thus you accumulate the leave between contracts.<p>2. You don&#x27;t have to waste as much time on company&#x2F;organisation bureaucratic processes such as training you didn&#x27;t want to do, having to write out performance agreements, attending all staff meetings talking about the 2% pay rise you might get each year, etc and instead you can focus on getting your job done and building out your CV faster.<p>3. Generally contractors are kept on longer than permanent staff if a project or organisation is on the slide as contractors can be cut off abruptly and without reason when things get really bad, whereas an organisation needs to spend much more effort reducing permanent staff numbers and therefore have to start the process earlier for reducing permanent staff. Permanent staff get 4 weeks minimum notice of being made redundant whereas contractors on paper get 1 hour&#x2F;1 day notice. In reality, contractors get more notice because they&#x27;ll see permanent staff redundancies on the way and know to start looking for other work and if it doesn&#x27;t arrive quickly, the organisation will have got rid of permanent staff quite often before they let their last contractors go.<p>4. It&#x27;s easier to get labour hire work because there is less risk to both parties in just having a single meeting and then agreeing to a start date of tomorrow. If it doesn&#x27;t work out for either party, the agreement can just as readily and easily be cancelled soon thereafter and not much is lost by either party. Permanent staff have to jump through multiple rounds of interviews, waste the valuable time of those in their work network to complete references, etc.<p>5. It forces workers to re-evaluate their worth at the end of each project as they&#x27;re back on the market and will ask for current market rates for their next engagement. Permanent staff that stay more than 2-3 years in a role won&#x27;t be re-evaluated at current market rates and will fall behind significantly in salary.<p>Labour hire rates are readily discoverable on AusTender (Australian government website for publishing awarded contracts). For example, a SAP consultant at [1] was recently hired for what is likely a 1 year &quot;full time&quot; (1762hrs) term and charged to the Australian government at AUD$363,000 (including GST). From this published figure you can then deduct 10% GST, 6.85% payroll tax (ACT), insurance costs, payroll costs, etc to arrive at approximately AUD$300,000 equating to an hourly rate of AUD$170&#x2F;hr (at 1762hrs worked in the year which is 40hrs&#x2F;week x 44 worked weeks of the year). For low overhead labour hire firms, a casual employee may take home AUD$160&#x2F;hr from this arrangement which is roughly equivalent to a AUD$280,000 salary assuming long service leave, 4 weeks notice and redundancy payouts are negligible if a permanent worker was changing jobs at the usual rate of every 2-3 years. A permanent employee would be lucky to get a salary package of AUD$220,000 from this arrangement in part because the company has to cost in the chance of the employee staying long enough to be eligible for long service leave, redundancy payouts, etc.<p>General labour hire rates for Australian government work (and this generally transfers across sectors to private sector rates in ICT fields that are competing for similar talent) range from casual employee take-home rates of AUD$120&#x2F;hr (business analysts etc) to AUD$190&#x2F;hr (architects etc).<p>The second type of &quot;contractor&quot; is where a services business is established that has numerous clients and&#x2F;or may hire employees or engage subcontractors, accepts risk for work completed, carries a variety of insurances, manages more complex finances, performs a significant degree of business development to find more clients, etc. They are generally engaged for intermittent work at a week here, 2 days there, three weeks later, etc and rates can typically range from AUD$250&#x2F;hr to AUD$400&#x2F;hr. Typically work is not performed for less than a day at a time and there is a form of retainer agreement (often exceeded or extended). It is harder to find typical market rates for these services. Whilst you can see these arrangements pop up on platforms such as AusTender, you&#x27;re never really sure how many hours of services have been included and the conditions of those services. For example, whether travel is an additional expense charged separately (typical case) or whether travel expenses are built into the rates.<p>[1] <a href="https:&#x2F;&#x2F;www.tenders.gov.au&#x2F;Cn&#x2F;Show&#x2F;95fbaed8-b19d-4fcb-8f89-d49370ac5845" rel="nofollow">https:&#x2F;&#x2F;www.tenders.gov.au&#x2F;Cn&#x2F;Show&#x2F;95fbaed8-b19d-4fcb-8f89-d...</a>