[consulting] Figuring out what to pay an employee

[Tom Geller]

From: Sam Cohen <sam at samcohen.com> writes:

> Any suggestions for starting salaries?  How did those of you with employees
> first determine what salary to pay?

If you'll be billing out this person's hours, one way to approach it is as a fraction of the employee's billable rate. 

When I worked in public relations it hovered around 2-1/2. So if the billable rate was $50/hour, the employee got $20/hour, as $50 is ($20 * 2.5). Multiplied by 2,000 hours/year (50 weeks, 40 hours/week) = $40,000/year.

Others here can say whether that's common among developers, and what appropriate ratio is. Cheers,

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          Tom Geller  *  Oberlin, Ohio  *  415-317-1805
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