This formula was adopted from one being used by rates for engineers some years ago. What is listed below is for Australia. This is based on a 38 hour week for a full year.
|Public Holidays||12 days||92 hours|
|Annual Leave||20 days||152 hours|
|Long Service Leave||4.3 days||33 hours|
|Sick Leave||10 days||76 hours|
|Accident Cover||3%||60 hours|
|Professional Indemnity||3%||60 hours|
|Misc. leave (family, injury, etc)||3 days||23 hours|
|Professional Development||5 days||38 hours|
|Termination/Redundancy||5 days||38 hours|
Thus, your hourly rate should be calculated as 1980 hours (38 hour week for a full year) less 770 hours = 1210 hours. So, if you’re aiming for a regular income of $40,000 per annum, for example, your base rate would be $33.06 per hour. Then add to that an amount for taxes to put away, GST if you’re registered for it, and any other running costs, i.e. software, equipment, etc. However, you also need to consider that in running a business you won’t be spending 38 hours a week on client work. You will need to factor in time for marketing, networking, doing your own admin, etc. So realistically you need to consider all these things before working out your base rate to build upon.
While some costs can be on-charged to your clients such as printing, postage, phone calls, etc you need to ensure you think about how many hours you really will be working weekly to work out your hourly rate. Package rates can then be worked out knowing you are covering your costs for running your business.
Provided by: Kathie M. Thomas