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Need Some Advice

Old 08-10-2017, 12:40 PM
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I've got an opportunity to do some engineering work for a local company, but they are wanting me to do the work as an independant contractor. They've asked me to qoute them a per hour fee. I've never done it this way and have no idea of how much go charge for my time. The job, if done on a direct hire basis would pay in the 60-75K range.

Can anybody give me some recommendations on how to go about figuring an hourly rate for an independant contractor doing the work. Any help will be greatly appreciated.
Old 08-10-2017, 12:44 PM
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Can you figure out the number of hours it would take, then, using your total job estimate, go from there?
Old 08-10-2017, 12:46 PM
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Here's my thoughts:

75K a year is 37.50 per hr. If you worked for a contractor that hired you out to the engineering firm they would probably charge around $80 pr hr for you.

If you worked for a company that has benefits your 37.50 per hr is probably worth $70 per hr or so.

I would guess you could quote the local company 60-70- per hr for short term work. More for very short term.
Old 08-10-2017, 12:49 PM
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What type of engineering? Are we talking about civil stuff, or EE HW design, or ??
Old 08-10-2017, 12:52 PM
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don't forget your TAXES! on that sweet 1099! you will be getting

and add on 15% for the fact that they are only wanting someone short term and you are "the guy"
Old 08-10-2017, 12:54 PM
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Be very careful regarding liability. As an independent contractor you probably need your own insurance policy.

I'm an owner of an engineering firm. Our break even is around 2.0 multiplier on a person's take home salary. Our hourly rates are in the 3.25 to 4.0 multiplier range.
Old 08-10-2017, 01:50 PM
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Originally Posted by ericinmich View Post
What type of engineering? Are we talking about civil stuff, or EE HW design, or ??
Manufacturing/Industrial Engineering
Old 08-10-2017, 01:55 PM
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Originally Posted by BoatP2Lee View Post
I've got an opportunity to do some engineering work for a local company, but they are wanting me to do the work as an independant contractor. They've asked me to qoute them a per hour fee. I've never done it this way and have no idea of how much go charge for my time. The job, if done on a direct hire basis would pay in the 60-75K range.

Can anybody give me some recommendations on how to go about figuring an hourly rate for an independant contractor doing the work. Any help will be greatly appreciated.
I would ask them whats fair? you might be surprised... you might also be seriously limiting your income.

For all you know, they might say 200 dollars an hour... if they lowball you at 40, tell em to pound sand.
Old 08-10-2017, 01:57 PM
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Originally Posted by spraynet 1 View Post
Can you figure out the number of hours it would take, then, using your total job estimate, go from there?
I really don't know. Due to the nature of the work it would vary on each individual RFQ thatl would be working on.
Old 08-10-2017, 02:30 PM
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At the large oem that I worked for we would hire full time contract engineers for 100k or more, so about 50 an hour. Short term work would be more. Another thing to factor in is if you want to work there long term.
Old 08-10-2017, 02:35 PM
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$100 an hour has a nice ring to it.
Old 08-10-2017, 02:43 PM
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Do not forget to check w your insurance company concernng this job.
May not cost a lot, but not telling them might mean they could tell you bye bye.
Old 08-10-2017, 03:21 PM
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Originally Posted by Insider View Post
don't forget your TAXES! on that sweet 1099! you will be getting

and add on 15% for the fact that they are only wanting someone short term and you are "the guy"

This, by the time you compute SS/MEdicar tax, and all federal and state you will see about 45% go to taxes plus you have no benefits.

I have couple retired engineers that are clients and they do some free lance work from time to time. They charge $100 per hour minimum.

Plus they carry E&O and Liability insurance which is not cheap
Old 08-10-2017, 03:27 PM
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Since no one else asked, I will...

Are you a licensed professional engineer?
Old 08-10-2017, 03:36 PM
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Originally Posted by STIPulation View Post
Since no one else asked, I will...

Are you a licensed professional engineer?

Or have you stayed at a Holiday Inn recently?

Old 08-10-2017, 03:50 PM
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As an independent contractor, you are going to be responsible for the taxes normally paid by your employer, as well as covering your own healthcare, etc. If working on an hourly rate, you are only going to get paid for time on the job (most likely), and may have some weeks with less than 40 hours if things are slow and they don't need you.

To figure an hourly rate, I would take the average salary for the job you would be doing, and triple that to come up with something in the range of what you would want or need to charge to make this viable. So, for a $70K salary, your hourly rate would be ~$100/hr ($70K is $33/hr, times 3 is ~$100/hr).

Keep in mind too you are probably going to want to incorporate some kind of business to get paid through, which will involve a small amount of legal fees. Then you will likely also want to use an accountant to make sure you are maximizing your cash flow. Of course, these people cost money, and you need to factor that in.

From the perspective of "selling yourself", take your time to come up with your rate, do some research. You only get what you ask for. Be prepared and able to defend your rate if the customer pushes back (and even if they are perfectly happy with your initial quote, they may push back just to see if they can get you down).

You may also want to consider telling them you have a daily rate, not an hourly one, or an X hour minimum for any given day. This helps eliminate situations where they try to nickle and dime you, 3 hours today, 6 tomorrow, 5 the next day, etc.
Old 08-10-2017, 04:02 PM
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I have literally dozens of 1099s like you...albeit at higher rates.

Your guy has a formula...and won't move off it much unless you have spooky market value.
You don't.

His job is to get you for the least amount possible within his need-pain.
He does it all the time probably...you never have apparently.

So...a guy I would pay $75k per year would get a 1099 offer of about $50 per hour.
At that rate I would provide his desk and telephone and office ammenities etc.
He would provide his own computer, cellphone etc.

Hope that helps.
Old 08-10-2017, 04:15 PM
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Originally Posted by STIPulation View Post
Since no one else asked, I will...

Are you a licensed professional engineer?


No, unfortunately, I never pursued my PE Certification. All I have is 40+ years experience as a non-degreed Industrial Engineer. My degrees are in Business and Economics.
Old 08-10-2017, 04:25 PM
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I'm retired but do some consulting for an engineering firm. A lot depends on your experience and how much street creds you have. Figure what an average hourly rate for someone with your experience would be and then go somewhere between 150 - 200% of that to cover your health insurance, taxes, workers' comp, vehicle, computer, retirement, etc.

So if your hourly rate would be $50 then charge somewhere between $75 and $100 per hour. Also, make sure either the company insures you for E&O or self insure - especially in an engineering job.
Old 08-10-2017, 05:49 PM
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Originally Posted by BoatP2Lee View Post
No, unfortunately, I never pursued my PE Certification. All I have is 40+ years experience as a non-degreed Industrial Engineer. My degrees are in Business and Economics.
Much espect for your experience. Not trying to be a dick, but practice as an engineer requires licensure. You really need to find a firm to work under if you're going to contract this job. If you can legitimately call it something other than engineering you might be ok.

http://www.scstatehouse.gov/code/t40c022.php

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