How do you translate a per year salary into a part-time per hour job?

Question

Let's say I'm working part-time and remotely for a company in NY, paid per hour. If I would work there full-time, I would be getting 55K per year + benefits. Instead, I'm working part-time on an hourly basis, with a range of about 15-20 hours per week, give or take a bit. How much should I be getting as an hourly rate?

Factors to take into consideration - my pros and cons -

Pros

• Part-time
• Remote
• Choose my own hours, within reason

Cons

• No insurance/benefits
• No paid time off
• No guaranteed amount of hours

Answer 1

If you're really a part-time worker, then there are some simple considerations....

• Depending on definition, there are 1920 to 2080 work hours in a year. Given two weeks vacation a year, we can assume 2000 hours a year, which amounts to $27.50 an hour.
• Not having paid time off is already accounted for because we subtracted the vacation hours for our $27.50 calculation.
• Benefits are harder, but it's reasonable to assume 15-25% of gross salary as the value of benefits. However, I can't see a company giving bonus money to part-time employees just because they don't need to pay benefits for them.

The remote working environment, choice of own hours, and non-guarantee of work availability point to your "part-time" situation being more like a consultancy, and that would normally double or triple the gross hourly rate. But if they're already offering or paying you a low hourly figure, they are unlikely to give you consultant rates.

Answer 2

All things being equal, a $55,000/year job with 25% benefit load is about $68,750/year. That's a little more than $34/hr.

Your rate really depends on the nature of the work. If it's strictly a part-time job where you are an employee, you're probably looking at a $28-38/hr range.

If you're an independent contractor, the rate should be higher, as you're paying the taxes, doing other administrative stuff. How much higher depends on the industry... software/it rates are usually 1.5-2x, construction is driven by the union scale in many places, etc. Note that you need to meet criteria defined by the IRS to successfully maintain independent contractor status from a tax POV.

Answer 3

Rule of thumb: Double your hourly rate to get a yearly salary (in thousands). Halve your yearly salary to get your hourly rate. (assuming a 40hr/week job).

eg: $50k/year = $25/hr.

Answer 4

There is no fixed formulae, its more of how much you can negotiate Vs how many others are willing to work at a lower cost.

Typically in software industry the rates for part time work would be roughly in the range of 1.5 to 2 times that of the full time work for the same job.

With the above premise roughly the company would be willing to pay $100,000 for 2000 hrs of Part time work(1), translating into around $50 per hour. How much you actually get would depend on if there is someone else who can work for less say at $30 at hour.

(1) The company does not have 2000 hrs of work and hence its engaging part time worker instead of full time at lesser cost.

Answer 5

As an easy and rough rule of thumb, a job for $55,000 per year is $55 per hour as a contractor.

That's roughly twice the hourly rate. In return, the company gets the rate to vary your hours or cease your employment with less financial, legal or managerial overhead than a full time employee. You have less stability, less benefits, perhaps need to put some time into finding another job sooner.

Of course the ultimate, though less helpful, answer is "whatever the market will bear."