Can you explain how contractors get compensated?« Back to Questions List

Most of the time contractors get paid hourly, which results in getting paid for every hour they put in at the client site. However the over-time may or may not be authorized by the client. Depending on the assignment there may be more or less overtime and it may be hard to predict in advance. As a contractor you must negotiate your pay rate carefully taking this and other aspects into consideration. Staffing companies offer different benefit packages to their contractors. First you must get a clear picture of what you are dealing with. You should find out if there is any PTO or holiday pay available, and ask them to quote you on the insurance coverage of your choice. Once you obtain this information you can calculate what hourly pay rate would make sense. Generally staffing companies provide limited benefits to their contractors or none at all. Therefore it is customary for contractors to receive a 20%-30% higher pay to make-up for these deficiencies. As a career strategist, I always suggest looking beyond the monetary piece and assess the big picture. For IT professionals especially, certain assignments may offer an opportunity to get hands-on, large scale exposure to new technology that would lead to more interesting and lucrative work in the future. It is wise to evaluate the opportunity from every angle, weigh all pros and cons and if you come to a conclusion that pay is the only issue, negotiate!