When calculating hourly rates consider the following points:
Hourly rates can be identified by two types of costs, namely
(1) payroll costs and (2) opportunity costs4.
'Opportunity costs' are defined as
billable hours to a client and are typically more relevant to high-performing
employees.
Remuneration costs vary according to wages, salaried and
executive staff and include the total cost of salary
and benefits where applicable. If you are unsure of
how to calculate the cost of benefits estimate them at
35% of the salary cost. Additional on-costs such as superannuation
can be estimated at 20% of the salary figure.
4. 'Costing Human Resources', Wayne Cascio, PWS Kent (1991)
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