What’s the Typical Contractor Hourly Rate: Factors You Need to Consider

What’s the Typical Contractor Hourly Rate: Factors You Need to Consider
What’s the Typical Contractor Hourly Rate: Factors You Need to Consider

One of the most common questions we get asked here is about the regular contractor hourly rate. Employers who have never used a staffing firm before want to know what they should expect to pay to recruit top talent. Engineers and programmers working as salaried or hourly employees want to know how contract rates stack up.

The truth is that contractor hourly rates vary wildly based on the skills and experience of the contractor, as well as the circumstances of the job. With that in mind, I’ll try to answer some of the most frequent contractor hourly rate questions we get here below.

Three Contractor Hourly Rate FAQs

Do contractors earn more than salaried employees?

On a per-hour basis, contract labor typically earns more than salaried employees. There are two main reasons for this. The first is that contractors rarely receive health benefits, PTO, or vacation pay.

The second is that contractors are typically only brought in to deal with specific projects or during times of high demand. Unlike salaried employees, who may occasionally find themselves getting paid to do very little during slow periods, contract employees are paid to deliver.

Am I paying too much to hire contractors?

This depends greatly on your specific situation. In general, the contractor hourly rate can appear high for the reasons I went over above. If you typically pay engineers $35 an hour and are paying a contractor hourly rate of $55, it might feel like you are paying more for contract labor.

When you factor in the non-salary costs associated with the $35 an hour engineer, you will see the numbers are a lot closer. Factor in the flexibility associated with temp labor and it is often the more cost-effective option.

What should I be paying per hour to attract the best candidates?

This one can vary significantly, but you get what you pay for. With the rise of remote staffing, many organizations are turning to outsourced contract work to undercut the labor market.

If a contract worker agrees to accept wages lower than what you would typically pay a full-time employee, this raises several red flags. Whether contract or full-time, attracting top talent requires competitive wages.

Have a question about the contractor hourly rate? Let us know in the comments.

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