Hourly rate - 'rule of thumb'

[rogerthedodger]

Just thinking back on this thread.

Please note that this rule of thumb is to give you an idea of what hourly rate as a contractor is roughly equivalent to an annual salary.

This has absolutely nothing to do with what hourly rate you might be worth as a contractor.
The rate you get as a contractor is based on experience, quality, going rate, competition and luck.

You might say that the equivalent to your current package is £110 an hour, but then discover by searching on job boards that most of the jobs you are qualified for are paying £60 an hour. That's because that's the going rate.
I would suspect that there are far more contractors on here who are invoicing at < £50 per hour than there are invoicing at > £120 per hour, and those that are getting the top figures will have been working in their area for quite some time with a good client portfolio.

Or, to put it another way, if you have a permanent job, are earning the kind of money you've talked about and are interested in high earnings, stick with your permanent job. Your hourly rate contracting is only your hourly rate when you are working. When you take a holiday or are on the bench looking for work, your hourly rate is £0, which is the equivalent of an annual salary of £0.

Yes I agree of course that market forces etc obviously dictate but I wanted to just do a sanity check on the /1000 rule of thumb, but before doing so I just wanted to make sure I understood the rule correctly. Based on what you've said, the rule seems to work in my particular case. When I started as an independent in 1993 I was advised to quote £400 / day. I've upped this since then in line with inflation and in today's money it's about 800 which is mostly achieved and equates roughly to 100 / hour which is what the rule of thumb seems to suggest. Sorted. Many thanks.