https://blog.andrewmcwatters.org/index.php/2022/09/26/contract-to-hire-discount/

Andrew McWatters

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Contract To Hire Discount

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In software development, contract to hire employment is common.
Usually, a contractor and employer will agree to an hourly rate. Upon
conversion to full-time employment, this hourly rate will also
convert to a salary.

When employers adjust base pay, they will usually adjust it down to
account primarily for two employer contributions. These are a 401(k)
match, usually at 3%, and a health insurance employer contribution,
which at the time of writing (2021/2022) is on average $16,253 / yr^
1.

When you agree to a rate as a contractor, this rate should thusly
include a 3% + $8.00/hr premium. Without this rate premium, a
contract to hire agreement is a discount for the employer.

^1 https://www.kff.org/health-costs/report/
2021-employer-health-benefits-survey/

#

Hacker News Front Page, Sep 26, 2022

https://news.ycombinator.com/item?id=32986450

September 26, 2022

andrewmcwatters

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