How to Charge for Contract IT Work

How to charge for contract IT work

Question: How do you decide what to charge for computer consulting work?

My Answer:

I’ve done some contract sysadmin work for a few small businesses in the past. There are a couple of ways to go. Charge per job, and charge per hour. I lean towards the charge per hour, typically to avoid scope creep. (eg. the business adding more items to the todo list into the same “job”) This can be avoided with a good Statement of Work defined up front.

For the hourly rate: The rate you charge is really a combination of a few things; location, the business itself, scope of work and experience.

Location and Type of Business - Obviously you can get a higher rate in NYC than in the middle of Vermont. Same goes for the type of business. Some smaller businesses just aren’t able to pay more.

Scope of Work - I generally charge less for a business that wants me to come in every few weeks/months for routine maintenance. The business that wants a “fix everything one time” solution will get charged a bit more. Higher complexity jobs command a higher hourly rate.

Experience - If you would like to take only the more interesting, higher complexity jobs, I’d recommend setting a fairly high minimum rate. This will eliminate the businesses looking to lowball you, and also the “Can you install my printer?”-type jobs.

My recommendation if you decide to choose the hourly rate path - always charge more than you initially think. If you think $60/hour is a fair rate, charge $100/hour. It’s always easy to negotiate down if you need to, much harder to negotiate up.