Join Early Retirement Today
Reply
 
Thread Tools Search this Thread Display Modes
Convert Salary to 1099
Old 01-20-2015, 10:12 AM   #1
Thinks s/he gets paid by the post
jIMOh's Avatar
 
Join Date: Apr 2007
Location: Milford, OH
Posts: 2,085
Convert Salary to 1099

Anyone have a good equation to equate salary with a 1099 rate? My math is salary/2000+$15/hr
Is cost of benefits and taxes worth $15/hour?
__________________

__________________
Light travels faster than sound. That is why some people appear bright until you hear them speak. One person's stupidity is another person's job security.
jIMOh is offline   Reply With Quote
Join the #1 Early Retirement and Financial Independence Forum Today - It's Totally Free!

Are you planning to be financially independent as early as possible so you can live life on your own terms? Discuss successful investing strategies, asset allocation models, tax strategies and other related topics in our online forum community. Our members range from young folks just starting their journey to financial independence, military retirees and even multimillionaires. No matter where you fit in you'll find that Early-Retirement.org is a great community to join. Best of all it's totally FREE!

You are currently viewing our boards as a guest so you have limited access to our community. Please take the time to register and you will gain a lot of great new features including; the ability to participate in discussions, network with our members, see fewer ads, upload photographs, create a retirement blog, send private messages and so much, much more!

Old 01-20-2015, 12:07 PM   #2
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
braumeister's Avatar
 
Join Date: Feb 2010
Location: Northern Kentucky
Posts: 8,630
When I started doing that, I used 1.8 times my former salary (on an hourly basis). Seemed reasonable, and people paid it.
__________________

__________________
braumeister is offline   Reply With Quote
Old 01-20-2015, 12:14 PM   #3
Thinks s/he gets paid by the post
MooreBonds's Avatar
 
Join Date: Aug 2004
Location: St. Louis
Posts: 2,091
Quote:
Originally Posted by jIMOh View Post
Anyone have a good equation to equate salary with a 1099 rate? My math is salary/2000+$15/hr
Is cost of benefits and taxes worth $15/hour?
All depends on what benefits package you need to add. And remember - whether you're doing this as a moonlighting gig or bread and butter doesn't matter. You should charge about the same hourly rate. Obviously, you might have to lower your hourly rate a little bit to be competitive, but don't be shy in asking a reasonable, hourly rate.

When you factor in self-employment tax, vacation, insurance, home office overhead, various other fees, expenses, costs, registrations, insurance, etc., it could be a lot more than $15/hour (partly depends on what your raw salary hourly rate is).
__________________
Dryer sheets Schmyer sheets
MooreBonds is offline   Reply With Quote
Old 01-20-2015, 04:30 PM   #4
Recycles dryer sheets
txtig's Avatar
 
Join Date: Mar 2013
Location: Sugar Land
Posts: 284
I did this a while back. I added annual amounts for base salary + bonus + company provided stock grants + company match on 401k + company contribution to health insurance (4 times my cost) + company portion of FICA + company cost for life insurance + company provided retirement contribution. This gave me the total annual company cost of my compensation. I divided that sum by the 44 weeks that I needed to work to earn that compensation (considering six weeks vacation and two weeks of holidays). That gave me a weekly all-in rate, which divided by 40 gave me an hourly rate.


Sent from my iPhone using Early Retirement Forum
__________________
txtig is online now   Reply With Quote
Old 01-20-2015, 04:52 PM   #5
Thinks s/he gets paid by the post
 
Join Date: Mar 2010
Location: Kerrville,Tx
Posts: 2,726
Staff benefit ratios often appear at 39% or more of base salary (includes employer SS, medical, vacation, pension, 401k unemployment workers comp...) Various articles suggest that benefits run about 30% of wages. This bls report suggests 35% in 2014
Employer Costs for Employee Compensation news release text
__________________
meierlde is offline   Reply With Quote
Old 01-20-2015, 05:56 PM   #6
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
Brat's Avatar
 
Join Date: Feb 2004
Location: Portland, Oregon
Posts: 5,914
I think 35% is a fair number overall.

6.2% SS
1.45% Medicare
2 weeks vacation = 3.8%
1 week sick leave = 1.9%
8 holidays = 0.4%

(13.75% so far)

Then you need to factor in the cost of health insurance and other fringe benefits common to your industry/profession.

Keep in mind the fact that if you are engaged by a third party they charge at least double your base pay.
__________________
Duck bjorn.
Brat is offline   Reply With Quote
Old 01-20-2015, 07:28 PM   #7
Thinks s/he gets paid by the post
 
Join Date: Jul 2012
Location: Mississippi
Posts: 1,878
Quote:
Originally Posted by jIMOh View Post
Anyone have a good equation to equate salary with a 1099 rate? My math is salary/2000+$15/hr
Is cost of benefits and taxes worth $15/hour?
There are some online calculators, like this one W2 to 1099 Rate Converter
__________________
rbmrtn is offline   Reply With Quote
Old 01-20-2015, 08:16 PM   #8
Thinks s/he gets paid by the post
jIMOh's Avatar
 
Join Date: Apr 2007
Location: Milford, OH
Posts: 2,085
Quote:
Originally Posted by jIMOh View Post
Anyone have a good equation to equate salary with a 1099 rate? My math is salary/2000+$15/hr
Is cost of benefits and taxes worth $15/hour?
The $15/hour is 25% of my base ($120k/yr)
__________________

__________________
Light travels faster than sound. That is why some people appear bright until you hear them speak. One person's stupidity is another person's job security.
jIMOh is offline   Reply With Quote
Reply


Currently Active Users Viewing This Thread: 1 (0 members and 1 guests)
 
Thread Tools Search this Thread
Search this Thread:

Advanced Search
Display Modes

Posting Rules
You may not post new threads
You may not post replies
You may not post attachments
You may not edit your posts

BB code is On
Smilies are On
[IMG] code is On
HTML code is Off
Trackbacks are Off
Pingbacks are Off
Refbacks are Off


Similar Threads
Thread Thread Starter Forum Replies Last Post
401(k): To convert, or not to convert, that is the question jnojr Young Dreamers 21 04-10-2012 04:58 PM
IRS form 1099-C dwk FIRE and Money 5 01-28-2007 03:36 PM
As a business owner, how do I file my 1099's for my contractors? thefed Other topics 5 01-23-2007 03:13 PM
Roth Conversion Process: Form 1099-R ERD50 FIRE and Money 14 11-22-2006 02:50 PM

 

 
All times are GMT -6. The time now is 11:43 PM.
 
Powered by vBulletin® Version 3.8.8 Beta 1
Copyright ©2000 - 2017, vBulletin Solutions, Inc.