Most people understimate the actual costs of “going full time” in their chosen field.
They look at their paycheck, often AFTER taxes, and conclude they don’t need to work too hard to “exceed that”.
But usually that’s wrong.
In the illustration below, the cost of benefits is way low if you have a family.
In many places, family health coverage alone costs $12,000 per year.
The figure below may apply to a single person but does it really include everything like retirement benefits, disability, dental, etc.?
Nor does the figure include overhead to operate your business which could be a factor too.
If you were giving a quote to your client, you’d research ALL the variables to get an accurate price and know if you’re making money.
Do yourself the same favor!
From Life Hacker via Dane
The place to start is you. What’s your target salary? And let’s be realistic here. If you have employees, you’ll need to add up all the salaries. On top of that, you’ll need to figure in other associated costs like taxes, FICA, insurance, etc. A safe figure is 25-30%. I lean toward 30%. The math looks like this:
Salary: $40,000
Associated costs at 30% of salaries: $12,000
Total: $52,000
Well, that’s a start. So how many hours are there in a year? Hmmm; let’s see. Eight hours each day. Five days in a work week. Fifty-two weeks in a year that’s … er… Hang on. I’ll save you the trouble of digging out that calculator. It’s 2,080 hours.
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