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» What An Employee Really Costs             » 10 Reasons To Use A Consultant
 
 
 

 

What An Employee Really Costs

 
$120,000 Base Salary (experienced engineer)
     8,170 FICA (7.65% employer contribution on 1st $106,800)
       238 Unemployment Insurance (3.4% on 1st $7,000)
(rate and base varies by state)
     1,026 CA State Disability Insurance (1.1% on 1st $93,316)
       8,945 Health/Dental Plan (per year — see below)
     4,800 Matching Retirement Contribution (per year)
$143,179 Actual Cost of Employee (including taxes & benefits)
 
    2,080 Available Work Hours (per year)
        80 Vacation Time (10 days*)
        80 Holiday Time (10 days)
        40 Sick Time (5 days)
       235 Wasted Time (1 hour per day**)
    1,645 Actual Hours Worked
       
   $57.69 Apparent Hourly Rate ($120,000 ÷ 2,080)
   $87.04 Actual Hourly Rate ($143,179 ÷ 1,645)
 
     


     * This is based upon 2 weeks vacation. Many experienced engineers get
        3 or 4 weeks vacation increasing the Actual Hourly Rate even more.

   ** Wasted time (email, internet, phone, office chit-chat, etc) can be much
        more than this. According to a recent survey (below), more than 2 hours
        per day are wasted! This makes the Actual Hourly Rate for an in-house
        engineer jump to more than $101 per hour.

A consultant may cost a bit more, but when the project
is completed, the consultant is no longer on your payroll.


    See http://www.sfgate.com/cgi-bin/article.cgi?file=/g/a/2005/07/11/wastingtime.TMP
    for the San Francisco Chronical's report on the "Wasted Time At Work"
    survey by America Online and Survey.com.

    See http://www.mercer.com/ushealthplansurvey for the Mercer 2009 National
    Survey of Employee-Sponsored Health Plans
.

 

 
 
 
 
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(619)579-6916
 
 
 

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