[SASAG] Consulting Rates

Hal Pomeranz hal at deer-run.com
Mon Jun 2 12:00:37 PDT 2008

> I am thinking of doing a little consulting on the side and am trying to
> figure out an hourly or contract rate for general Sys Admin type of
> services for small businesses.  What type of rates are people charging?

For full-time consultants, the "rule of thumb" formula for hourly rate
is usually "(current annual salary * 2) / 1200".

The explanation of this formula is as follows:

1) Consultants have higher costs than salaried employees.  You have
to pay the "employer's share" of the taxes, buy your own benefits, etc.
To maintain your current standard of living, expect to have to bill
double your current annual salary.

2) You're not going to be able to bill 2000 hours a year, especially
when you're just starting out.  You'll have downtime when looking for
new business, etc.  Figure on 1200-1500 billing hours per year.  I went
with the more conservative end of this range in the above formula.

If you don't think your personal salary is representative of what
people in your area are making, you can always look on monster.com or
one of the other jobs boards to get an idea of the salary ranges for
different kinds of Sys Admin work in your area.

Good luck!

Hal Pomeranz, Founder/CEO      Deer Run Associates      hal at deer-run.com
    Network Connectivity and Security, Systems Management, Training

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